Ladbrokes has confirmed it will merge with rival gambling company Gala Coral to create a bookmaking giant with a market value worth £2.3bn.
The new combined company will have net revenue of £2.1bn and deliver cost synergies of £65m a year.
With 4,000 outlets, Ladbrokes Gala Coral will overtake William Hill to become the largest high street betting agent.
Peter Erskine, Chairman of Ladbrokes, said, 'This is a major strategic step for Ladbrokes which firmly accelerates our strategy to improve the customers' experience and build recreational scale. Ladbrokes and Coral are two highly complementary businesses, with rich heritage and brand presence across the UK and internationally.
'Together, we will create a leading betting and gaming business combining strong brands with an attractive multi-channel offering and an extensive national and international coverage. The transaction will provide an attractive opportunity to generate considerable value for both sets of shareholders, through significant operating synergies and a strong cash flow profile.'
Rob Templeman, Chairman of Gala Coral, said, ''Today's announcement is testimony to the track record and achievements of the Gala Coral team in delivering a significant transformation of the business over the past four years. This strategic combination is a natural fit and will offer further opportunities for growth. Coral Group's online strength and high street presence will complement Ladbrokes' established brand and footprint in the UK and internationally.
'Together, the two businesses will have a strong digital presence with market leading technology, innovation and access to significant resources to drive continued growth and deliver enhanced returns for all shareholders.'