According to reports published in British broadsheet newspaper the Daily Telegraph, Ladbrokes (LSE: LAD) — the renown UK online gambling company and bookmaker who are currently in negotiations with online gambling company 888 Holding (LSE: 888) regarding a possible £240 million takeover — is currently holding merger talks with the successful online gaming software company Playtech (AIM: PTEC).
The merger could potentially be worth approximately £2.2 billion ($3.5 billion). Moreover, it would see Ladbrokes mutate from a business which primarily operates via direct contact with its customers and users of its land based and online-betting services to a business who simultaneously supplies online casinos, poker rooms and sportsbooks with software.
The merger, however, could also potentially complicate an agreement and deal arranged in 2008 between Playtech and William Hill: a key rival of Ladbrokes.
Merger talks have been commonplace in the gambling industry of late. Indeed, PartyGaming Plc and bwin Interactive Entertainment AG are also said to be in merger talks which were first initiated back in 2009. Should the two decide to merge, both companies would form the largest public listed online gaming group in the world.
Yet the gambling industry has learned from past experience that merger can often become prolonged and may even ultimately yield very little. For example, 2006 saw talks between Ladbrokes and 888 grind to a standstill.
