Bookmaker Ladbrokes has announced plans to merge with Gala Coral, in a deal predicted to value the newly created business at £2.3 billion.
Combining Ladbrokes' 2,100 shops with Coral's 1,845, will take them past the current high street leader, William Hill.
Jim Mullen who is currently Ladbrokes chief executive, will become the boss of the merged company, called Ladbrokes Coral.
Chairman of Ladbrokes, Peter Erskine hailed the merger as a "major strategic step for Ladbrokes".
He added: "Together, we will create a leading betting and gaming business. The transaction will provide an attractive opportunity to generate considerable value for both sets of shareholders."
Ladbrokes will offer 93 million new shares to investors to fund the deal, which represents 10% of the company.
Under the terms of the deal, those private equity owners will own 48.25% of the new company's shares, with the remainder being held by Ladbrokes shareholders.
Ladbrokes' share price fell 0.78% to 127p following news of the deal.
The deal comes just over a week after online bookmaker 888 Holdings won a takeover battle with GVC Holdings for rival Bwin.party in a cash and shares deal valued at about £898 million.
