UK betting giants Ladbrokes and Coral are negotiating a merger between the two, creating a larger firm with more than 400 shops.

Ladbrokes said in a statement, confirming media reports, that it is in discussions with the board of Gala Coral Group Limited regarding a possible merger of Ladbrokes and Coral Retail, Eurobet Retail and Gala Coral's Online businesses.

The combined entity would be listed on the UK Listing Authority and traded on the main market of the London Stock Exchange, according to the statement.

Ladbrokes, however, warned that there can be no certainty that a deal would be reached.

"Since becoming CEO my focus has been on a more aggressive plan to build digital scale and grow our recreational customer base across all channels, which is key to creating a more sustainable and growing Ladbrokes. My plans are well advanced and I look forward to presenting them to shareholders," said Jim Mullen, CEO, Ladbrokes.

"A merger with Gala Coral could create a combined business with significant scale and has the potential to generate substantial cost synergies, creating value for both companies' shareholders. The board has not yet concluded whether a transaction is strategically attractive and can be delivered to shareholders on appropriate terms."

In 1998, Ladbrokes attempted to take over Coral for £363m (€507m, $576m), but the move was blocked by the government due to competition concerns.

Ladbrokes and Coral are the second and third biggest betting office operators in the UK behind William Hill. The merger is likely to win regulatory approval this time, as the combined entity is not poised to change competition in the betting industry, which has a number of thriving online competitors in addition to the traditional firms.