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Gambling giant Ladbrokes Coral has agreed to be bought by online rival GVC in a deal worth up to £4bn.

Under the deal, shareholders in GVC - which owns the Bwin, Sportingbet and Foxy Bingo brands - will hold 53.5% of the combined group.

Ladbrokes Coral became the UK's biggest High Street bookmaker following last year's merger of Ladbrokes and Coral.

The company has about 3,500 High Street outlets and employs more than 25,000 staff.

GVC - which has 2,800 employees - has grown rapidly in recent years through a number of takeovers, most notably that of Bwin.party in February last year.

Terminal blues

The final worth of the deal is dependent on the government's review of gaming machines known as fixed-odds betting terminals (FOBTs).

The Department of Culture, Media and Sport (DCMS) has said it will cap the size of stakes gamblers can make on FOBTs, amid concerns they may harm vulnerable people.

Ministers have proposed that bets on the machines should be cut from a maximum of £100 a spin to somewhere between £2 and £50.

GVC and Ladbrokes Coral have said that the review could hit the profitability of Ladbrokes Coral's UK business.

Ladbrokes Coral brands:

GVC brands:

Under the terms of the deal, for each share that Ladbrokes Coral shareholders own, they will get 32.7p in cash and 0.141 ordinary GVC shares, plus a "contingent value right" worth up to 42.8p.

The size of this contingent entitlement will be decided by the outcome of the DCMS review.

GVC chief executive Kenneth Alexander described the takeover deal as "a truly exciting prospect".

Ladbrokes Coral chairman John Kelly said the tie-up with GVC would "improve the customer experience, drive faster online growth and build a more diverse and extensive international portfolio of businesses".