British bookmakers Ladbrokes and Gala Coral on Friday agreed to merge, creating a £2.3 billion (€3.2bn) business with Britain's largest high street presence and one capable of better competing online.

Ladbrokes said on Friday that it would issue new ordinary shares to existing Gala Coral shareholders representing 48.25 per cent of the enlarged company. Existing Ladbrokes shareholders will own 51.75 per cent on the same basis.

To help fund the deal Ladbrokes is placing 93 million new shares, representing 10 per cent of the company.

The two businesses combined would have around 4,000 betting shops and also seek to close the gap on market leader William Hill which has pulled away from Ladbrokes thanks to stronger growth in its online business.

Current Ladbrokes chief executive Jim Mullen will become boss of the merged company, which will be named Ladbrokes Coral.

The two firms had announced merger talks last month.

Ladbrokes tried to buy Coral in 1998, but had to give up after the then British trade and industry minister, Peter Mandelson, stopped the transaction, saying the deal would damage competition and disadvantage gamblers.

Ladbrokes Ireland, which has 196 shops in the Republic, was placed in examinership in April.

Reuters