1,600 Jobs Could Go as GVC Closes in on Ladbrokes Coral Deal

GVC Holdings’ acquisition of Ladbrokes Coral could result in as many as 1,600 jobs being cut at all levels of the two companies.

GVC Kenny Alexander.

Current GVC boss Kenny Alexander will likely keep his position as the operator predicts 1,600 job cuts when it merges with Ladbrokes Coral. (Image: bloombergquint.com)

Outlining its takeover plans in the official Scheme Document, GVC representatives noted that new opportunities will arise following its acquisition but not before a reduction in staff.

A report by The Times has suggested that current Ladbrokes Coral chief executive Jim Mullen could be one of the high-ranking members of the team to lose their job.

All Change at the Top and Bottom

In contrast, GVC’s chief executive Kenny Alexander is likely to remain at the helm, while Paul Bowtell of Ladbrokes Coral would become the new chief financial officer. In addition to changes at the top, employee numbers at all levels of the newly formed company would be reduced by around 6 percent.

As well as the corporate restructuring leading to job cuts, the government’s forthcoming review of Fixed Odds Betting Terminals (FOBTs) could also impact the company.

“Such review would include considering whether to close any licensed betting offices (LBOs) that was expected to become unprofitable. It is not possible at this time for GVC to estimate the number of Ladbrokes Coral LBOs which might become unprofitable or whether any would have to close,” read a statement from GVC.

At this stage, any potential changes will be on hold pending the outcome of a Competition and Markets Authority (CMA) inquiry. Announced on February, the CMA review will look into the specifics of the merger and the potential impact it will have on the UK betting industry as a whole.

Concessions May be Necessary Before Deal is Done

Prior to the deal between Ladbrokes and Coral, the CMA recommended 642 factors that could adversely impact competition and customer choice. In response, the two operators agreed to sell almost 400 retail outlets in order to reduce its high street presence.

The outcome of the current inquiry isn’t expected until after April 6, which means GVC will miss its projected completion date of Q1 or early Q2. However, unlike two previous deals that ended due to a lack of willingness on both sides, it seems GVC and Ladbrokes Coral are keen to see this one get over the line.

“The Boards believe that a transaction has the potential to create material shareholder value and that there is a compelling strategic rationale for the possible offer,” read a November press release from GVC.

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