Coral executive Andy Hornby, the controversial former banker who presided over the collapse of HBOS at the height of the financial crisis, will take the role of chief operating officer of the UK betting shop and digital businesses, but he will not be on the public company’s board.

“This is a major strategic step for Ladbrokes which firmly accelerates our strategy to improve the customers’ experience and build recreational scale,” said Ladbrokes chairman Peter Erskine. “Ladbrokes and Coral are two highly complementary businesses, with rich heritage and brand presence across the UK and internationally.”

^{The new company will retain both Ladbrokes and Coral brands}

Given the deal will create a dominant player in the betting shops, the Competition and Markets Authority (CMA) will likely be a major obstacle to the deal. Without making any disposals, the new company would have more than 4,000 shops.

“Both Ladbrokes and Gala Coral are confident that the merger is deliverable and are committed to working closely with the CMA in its review,” the companies said on Friday.

However, they added that “it is anticipated that the combined entity will need to dispose of retail stores to satisfy potential CMA requirements”, although even after those sales it will still have the country’s biggest shop estate, the companies said.

Cost synergies are expected to reach £65m per annum three years after the deal completes. Ladbrokes also revealed that it was slashing its dividend to 3p as it attempts to shore up its finances.

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