Ladbrokes and rival Gala Coral have rubber stamped their merger, paving the way for the creation of a betting giant worth £2.3bn (€3.25bn, $3.56), dubbed Ladbrokes Coral.

The new firm will become the UK's biggest high street bookie with 2,100 stores, overtaking rival William Hill. The combined revenue of the two companies equates to £2.1bn.

Ladbrokes's chairman Peter Erskine 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."

The merger would see the FTSE 250 listed Ladbrokes hold 51.75% of the new business. Ladbrokes' CEO Jim Mullen has been appointed chief executive of the merged entity and Gala Coral's chief exec will be named deputy executive chairman for a year after completion.

Ladbrokes and Gala Coral are joining forces in order to better compete in a challenging market where they have struggled to compete with gambling giant William Hill.

Gala Coral's chairman Rob Templeman underlined the companies' desire to focus on online betting and the new shape of the industry. He said: "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."

The companies agreed on a deal just a week after competitor 888 announced it would buy Bwin for £900m.

The betting industry, which gained momentum in the financial crisis and is now trying to battle regulation and tax costs, has seen a spate of mergers and acquisitions after the crisis.