Bookmaker Ladbrokes Coral has agreed to a takeover by online rival and Foxy Bingo owner GVC in a deal worth up to £4bn.
The two firms had said earlier in December that they were in “detailed” discussions over a cash and shares tie-up.
The takeover comes after two previous attempts at a combination between the pair.
The deal will involve the creation of an online-led global gambling giant, combining Ladbrokes’ high street and online operations with GVC’s stable of brands, including Sportingbet and PartyCasino.
The terms of the takeover will involve GVC owning about 53.5% of the enlarged group with Kenneth Alexander, its chief executive, taking charge.
The deal follows mounting pressure on the industry over betting machines, which have been blasted as the “crack cocaine of gambling” by shadow culture secretary Tom Watson.
A review of the machines is expected to cut the amount of revenue they bring in.
Ladbrokes Coral chairman John Kelly said: “Ladbrokes Coral board believes that the proposed combination with GVC accelerates our strategy to improve the customer experience, drive faster online growth and build a more diverse and extensive international portfolio of businesses.
“The acquisition has compelling strategic rationale allied to an opportunity to use the best of both from proven management teams and will create material shareholder value.
“It secures earlier delivery of our long-term value potential, which is why the board of Ladbrokes Coral has unanimously recommended GVC’s offer.”
The combination will result in cost savings of at least £100m a year, the two companies said.
The terms of the deal mean Ladbrokes Coral shareholders will be entitled to 32.7p in cash, 0.141 ordinary GVC shares and a contingent entitlement of up to another 42.8p.
Ladbrokes completed its £2.3bn merger with Gala Coral in November 2016 but it is understood GVC first approached them with a takeover when it was finalising the deal.
There are almost 3,700 Ladbrokes bookies on the high street, employing more than 25,000 staff.
GVC has a range of brands and employs 2,800 employees and contractors throughout 15 offices around the world.