Rank Merger with Gala Coral Causing Concern

Rank Merger with Gala Coral Causing Concern

Written by: ava carson on 21/08/2012 20:45

The UK's largest casino operators planned merge has raised concern after being referred for a full competition inquiry.

The merger is no small acquisition at £205 million with a takeover of 23 Gala Coral sites by Mecca Bingo owner Rank there will be a total of 57 casino divisions. This would top the Malaysian Genting firm as the UK's biggest traffic for players.

The Office of Fair Trading (OFT) has apprehension the merger will vastly reduce competition at a national level. In nine local areas it has referred the deal to the Competition Commission for further review of the matter, despite Rank's proposition to divest of casinos in seven of its locations.

The OFT said reducing the competition from three to just two large national operators in the UK could very well result that is not good for the consumer. The concern rests in high barriers to entry and expansion in the sector, which would ultimately limit the ability of other players to replace the loss of competition.

OFT senior director Ali Nikpay said: "Rank and Gala are two of only three large national casino operators in the UK. The high barriers to entry and expansion in the casino sector mean the loss of competition could potentially be irreversible.

"As such, we believe it is appropriate that the Competition Commission reviews this merger in detail to ensure that the interests of consumers are protected."

The Competition Commission has the control to block the deal and will have a decision by February 3, 2012.

Rank on the other hand hopes to have it completely resolved by the end of September.

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