Creation of European online gambling giant: FDJ to buy Malta-based Kindred Group for $2.5 billion

Lea Hogg 2 months ago
Creation of European online gambling giant: FDJ to buy Malta-based Kindred Group for $2.5 billion

In another major deal in the gambling industry, France’s state-owned lottery operator FDJ has offered to buy Sweden’s Kindred Group for $2.7 billion. The acquisition would create a European leader in online betting and gaming, with a presence in 25 countries and a combined revenue of about 3.5 billion euros. FDJ said the deal would be financed by a mix of debt and equity, and would generate significant synergies and value creation. The Board of Malta-based Kindred Group has unanimously recommended its shareholders to accept the offer, which represents a 29 percent premium over its closing price on Thursday.

This development signifies a potential major shift in the online gambling industry, with implications for shareholders and the market at large. As the situation unfolds, stakeholders eagerly await further updates.

An industry insider shared some insights on the implications of this acquisition, suggesting that FDJ might use this opportunity to lobby for the opening of the online casino and online slots market in France. If successful, this could be a game-changer for the industry, potentially reshaping the landscape of online gambling in the country.

FDJ recently completed the acquisition of Premier Lotteries Ireland, the national lottery operator, for an enterprise value of 350 million euros ($381.40 million).

Since 2022, Corvex Management, the New York-based activist hedge fund, has been urging Kindred’s board to hire a financial adviser to explore strategic alternatives, including the potential value that could be realized through a sale or a business combination.

What this deal means to the sector

  • The FDJ-Kindred deal is a major consolidation in the European online gambling industry, creating the second-largest operator in the region.
  • The deal will boost FDJ’s growth and diversify its portfolio, adding Kindred’s online brands to its lottery monopoly in France and Ireland.
  • The deal will also enhance Kindred’s value and reward its shareholders, as FDJ offers a 24 percent premium over its closing price.
  • The deal will focus on regulated markets, as both companies aim to comply with local laws and regulations in the countries they operate.

Kindred’s statement

Kindred Group plc (Kindred) has issued a elaborate on the company’s strategic review which was initiated by the Board in April 2023. The company is continuing to explore options to enhance shareholder value, including other potential mergers or sales.

The statement also confirms that FDJ will acquire all outstanding shares of Kindred. This news follows press articles detailing the strategic review process, including specific information about a potential public offer by FDJ. 

This disclosure is in compliance with the EU Market Abuse Regulation (EU nr 596/2014), and was submitted for publication at 21:50 CET on 21 January, 2024.

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