GVC Holdings Set to Expand via New £4 Billion Deal with Ladbrokes

Published December 28, 2017 by Ivan P

GVC Holdings will have a majority share of 53% if the new deal is approved by the regulator and goes through as planned.

GVC Holdings, a growing market giant that came into the spotlight when they managed to acquire bwin.party in 2015 is set to continue its expansion. This time around, the company has secured a £4 billion deal with Ladbrokes. Pending the regulatory approval, GVC Holdings will own 53% of the newly formed group once the deal goes through.

Creating a Positive Momentum

This latest deal should work out in favor of both companies. Ladbrokes currently has more than 4,000 land-based betting shops and a limited online presence. GVC, on the other hand, has been taking over the online market through well-timed acquisitions.

Through the deal with Ladbrokes, GVC Holdings looks to further consolidate its position in the market. There are a few future developments that could make this deal a huge winner for the company, but there are also potential negative happenings lurking ahead.

Regulation in the UK and the US

One topic that's been very hot lately in the UK is the issue of the maximum bets on Fixed Odds Betting Terminals (FOBTs). The decision by the regulator is still pending, but it is very likely that the maximum wagering limits will be significantly reduced. This would naturally impact the value of Ladbrokes, whose main source of income are land-based bookies.

Of course, GVC accounted for this possibility in the deal, and the final price will be determined once the fate of FOTBs is decided. Should they be banned or the maximum bet reduced to £2, the acquisition will still go through, but at a reduced price of £3.2 billion.

As for the USA, the Supreme Court will be deciding on the issue of legal sports betting in the country. Should betting become legal, there will be a whole new market to tackle, and with Ladbrokes at their side, GVC Holdings will be in a prime position to take advantage of this favorable development.

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