The Rank Purchase of Gala Casinos Delayed By Office of Fair Trading
In May we brought you the news that Rank Group Plc had agreed to purchase the casinos of Gala Coral Group Limited for £205 million. The deal would see Rank – who own the Grosvenor brand – become the largest casino operator in Great Britain but that very fact has caused the deal to stall.
Should the deal go ahead it would mean there would only be two large national casino operators in the UK, Rank and Genting and this has given the Office of Fair Trading (OFT) reasons for concern. The OFT are worried Rank and Genting would be in such a dominant position that the merger would reduce competition at both a national level and in nine key local areas.
The industry believed the OFT would give the green light to the merger during the fourth quarter of 2012 but not this seems unlikely and there are certain parties who now believe the sale will no longer go ahead at all.
Ali Nikpay, a senior director of the OFT, said, “Rank and Gala are two of only three large national casino operators in the UK. This merger would represent a major consolidation which could be expected to reduce competition, both locally and nationally. The high barriers to entry and expansion in the casino sector mean the loss of competition could 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.”
Neither Rank or Gala were available for comment.