Bookmaker William Hill has struck an agreement to buy 624 betting shops from rival Stanley Leisure - owner of Birmingham's Star City casino - in a deal worth £504 million.
The additional sites will be rebranded as William Hill and enable the company to overtake Ladbrokes as Britain's biggest bookmaker.
The deal, which will leave William Hill with 2,237 licensed betting offices, still requires the approval of shareholders and competition authorities.
A sale of the betting business, which trades as Stanleybet, would leave Stanley with its casino arm.
William Hill described Stanley's bookmaking estate as "highly complementary" with its own, as Hill is currently under-represented in areas such as the North-west.
The company also pointed out that the profitability of the Stanley estate was " substantially below" its own and offered opportunities for improvement, including through the addition of more fixed-odds betting terminals.
It added: "William Hill has significant experience of developing licensed betting offices and is confident it can upgrade and improve the quality and performance of the acquired estate over time. The UK betting market is highly competitive and, accordingly, the board believes that any potential competition issues will not be material."
William Hill confirmed it was scrapping plans to return £453 million to shareholders.
Stanley said the group would likely return about £300 million to its shareholders.
Finance director Colin Child said: "We hope to update shareholders shortly after this deal completes in mid-June."
"Stanley shareholders are getting the better deal," said analyst Greg Feehely at Altium Securities. "The price is mindboggling - 13.5 times historic EBITDA (earnings before interest, tax depreciation and amortisation)." Shares closed down 141/2p at 5101/2p.