The French lottery operator La Francaise des Jeux (FDJ) has announced its intention to acquire the online gambling company Kindred Group for around $2.5 billion. The deal, which is expected to be completed by the end of the year, would create one of the largest and most diversified gambling groups in Europe.
Why FDJ wants Kindred
FDJ is the leading lottery operator in France, with a market share of over 50%. It also offers sports betting, online gaming, and entertainment services. FDJ has been expanding its international presence, with operations in 16 countries across Africa, Latin America, and Europe.
Kindred Group is one of the largest online gambling companies in the world, with more than 30 million customers in over 100 markets. It operates under several well-known brands, such as Unibet, 32Red, and Maria Casino. Kindred offers a wide range of products, including sports betting, casino, poker, bingo, and esports.
By acquiring Kindred, FDJ would gain access to a large and loyal customer base, as well as a diversified portfolio of online gambling products. The deal would also allow FDJ to strengthen its position in the European market, where Kindred has a strong presence, especially in the UK, Sweden, and Belgium. Moreover, FDJ would benefit from Kindred’s expertise in digital and innovation, as well as its social and environmental responsibility.
How the deal would work
The deal would be financed by a combination of cash and debt. FDJ would pay $2.5 billion for 100% of Kindred’s shares, representing a premium of 29% over Kindred’s closing price on Friday. FDJ would also assume Kindred’s net debt, which stood at $270 million as of December 31, 2023.
The deal is subject to regulatory and shareholder approvals, as well as other customary closing conditions. FDJ expects to complete the transaction by the end of 2023, subject to the satisfaction of these conditions.
FDJ and Kindred have agreed to a break-up fee of $75 million, payable by either party if the deal is terminated under certain circumstances, such as a superior offer from a third party, or a failure to obtain the necessary approvals.
What the deal would mean for the industry
The deal would create one of the largest and most diversified gambling groups in Europe, with combined revenues of over $6 billion and a market capitalization of over $10 billion. The combined group would have a leading position in both the lottery and online gambling segments, as well as a presence in over 120 markets worldwide.
The deal would also create synergies and cost savings for both parties, estimated at around $100 million per year by 2025. The deal would enable the combined group to leverage its scale and expertise to offer better products and services to its customers, as well as to invest more in innovation and sustainability.
The deal would also reshape the competitive landscape of the gambling industry, as it would create a new challenger for the existing market leaders, such as Flutter Entertainment, Entain, and Bet365. The deal would also trigger further consolidation in the industry, as other players may seek to join forces or acquire smaller rivals to compete with the new giant.
