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French Gaming Operator FDJ Wants to Buy Kindred Group

French Gaming Operator FDJ Wants to Buy Kindred Group

Posted on: Jan 22, 2024. Last Updated on: Jan 22, 2024.

Author: Erik Gibbs Expertise: Global Gaming, Asia Gaming, US Gaming, Sports Gambling

French Gaming Operator FDJ Wants to Buy Kindred Group

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In a landmark move that could reshape the European gaming landscape, La Française des Jeux (FDJ), a leading French gaming operator, has tabled a compelling all-cash acquisition offer for Kindred Group, a renowned European online betting and gaming firm. The proposed deal, valued at approximately €2.6 billion (US$2.7 billion), marks a significant milestone in FDJ's strategic growth aspirations and underscores its determination to establish itself as a dominant force in the European gaming industry.

FDJ Could Become Global Brand

FDJ's acquisition proposal, valuing each Kindred share at SEK130 (USD13.60), represents a substantial 24% premium over Kindred's closing stock price as of January 19, 2024. If successful, this merger would create a diversified European gaming sector champion, boasting a vast geographical reach and a comprehensive portfolio of gaming and betting products.

Kindred Announces Complete Exit from North American Gaming Market

The proposed acquisition has received an endorsement from Kindred's Board of Directors, who have recommended the deal to shareholders, according to a company statement. The combined entity, poised to emerge as a formidable competitor, is expected to leverage FDJ's strong financial standing and Kindred's innovative technology and market presence to achieve significant value creation for stakeholders.

FDJ, which just completed the purchase of the Irish National Lottery operator Premier Lotteries Ireland, intends to finance the transaction primarily through a significant portion of its readily available cash reserves and a bridging loan arranged with leading French banks. The tender offer for Kindred shares is scheduled to commence on February 19, 2024, subject to customary regulatory approvals.

Stéphane Pallez, Chairwoman and CEO of FDJ, expressed enthusiasm for the proposed acquisition, highlighting the complementary nature of the two companies and the immense value it promises to unlock. Nils Andén, CEO of Kindred, echoed this sentiment, emphasizing the potential for accelerated strategic growth and expansion within core markets.

A Gaming Paradigm Shift

The proposed merger between FDJ and Kindred stands as a watershed moment in the European gaming and betting industry. If materialized, this merger could reshape the competitive landscape, bringing together two industry leaders driven by a shared commitment to responsible gaming practices, financial stability and strategic expansion.

There is speculation that the French government, which still owns significant holdings in FDJ, may grant the operator an exclusive license to operate online casino games. This is a possibility because FDJ already holds a monopoly in several key gambling segments and contributes the most revenue to the gambling industry.

However, France's largest casino operators have accused FDJ of engaging in unfair practices to expand its dominance in the gambling sector. They are concerned that FDJ's expansion will harm competition and market fairness. They have recently expressed their concerns to French Prime Minister Gabriel Attal, bringing FDJ's expansionist strategies under scrutiny.