Ladbrokes and Coral offload 359 betting shops ahead of £2.3bn merger

Bookmakers Ladbrokes and Gala Coral have moved a step closer to their £2.3bn merger after agreeing to sell about a tenth of their combined betting shop network to smaller rivals.

They have agreed a £55.5m deal to sell 359 shops, employing about 2,500 people, to allay competition concerns over the tie-up.

Betfred is paying £55m for 322 sites while Stan James will pick up 37 outlets for £500,000.

Ladbrokes (LSE: LAD.L - news) chief executive Jim Mullen said: "The sale of these shops will clear the last significant hurdle to delivering on the merger with Coral."

The deal comes after the Competition and Markets Authority (CMA) found that the Ladbrokes-Gala Coral tie-up - agreed last year - could "lead to a worsening of the offer made to customers at both a local and a national level".

Ladbrokes said the disposal of the branches, which generated earnings of £16.8m last year, would slightly water down profits.

They include 185 Ladbrokes shops and 174 under the Coral brand.

Ladbrokes' merger with Gala Coral, subject to CMA approval, is expected to complete by the end of the month.

The larger group will now have about 3,600 betting shops and employ around 25,000 people.