GVC Holdings PLC has agreed to buy rival Ladbrokes Coral Group PLC in a deal worth up to £4bn, creating one of the world’s largest sports betting firms.

The announcement follows a statement earlier in December revealing the two were in “detailed discussions” about a potential merger.

The total price paid by GVC for Ladbrokes will depend of the outcome of the government’s review into fixed-odds betting terminals (FOBTs).

The Department of Culture, Media and Sports (DCMS) plans to cap the size of the stakes gamblers can make on FOBTs on concerns the machines were too addictive and fuelled problem gambling.

The DCMS has proposed cutting the maximum bet on the machines from £100 to between £2 and £50.

Ladbrokes Coral shareholders will receive 32.7p in cash and 0.141 ordinary GVC shares for each share they own.

They will also receive a “contingent value right” worth up to 42.8p, depending on the outcome of the DCMS review.

GVC, which owns Bwin and Sportingbet, said it expects the deal will be “double digit” earnings per share accretive from the first full year following completion, even if the maximum bet on FOTBs is set at £2.

It also expects the combined group will achieve recurring annual pre-tax cost savings of at least £100mln a year.

The creation of one of the world’s largest listed sportsbetting companies, combining a portfolio of established brands, proven technology and leading market positions in multiple geographies, is a truly exciting prospect,” said GVC chief executive Kenneth Alexander.

The deal follows several failed attempts by GVC of a takeover of Ladbrokes.