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March 1, 2024

FDJ Makes $2.8 Billion All-Cash Offer for Online Gambling Firm Kindred Group

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Jan 22, 2024

France’s state-owned lottery operator La Française des Jeux (FDJ) has made a SEK 130 per share all-cash offer worth $2.8 billion to acquire online gambling company Kindred Group, the companies announced Monday.

Key Details of Acquisition Bid

  • FDJ has offered SEK 130 ($13.50) per share in cash for all outstanding shares of Kindred Group
  • The offer represents a 26% premium over Kindred’s share price on Friday
  • The total equity value of the deal is $2.8 billion
  • Kindred Group’s board has recommended that shareholders accept the offer
  • The deal would significantly expand FDJ’s online presence and capabilities

FDJ said in a statement that the deal would create a “global online gambling leader” and allow the combined company to accelerate its development in international markets.

Kindred operates a number of gambling brands globally including Unibet, Stan James and 32Red. The company has over 26 million registered customers worldwide.

Background of the Two Companies

FDJ is France’s national lottery operator and has exclusive licenses for selling lottery games in retail locations and online. The French state owns 72% of the company after its 2019 IPO.

FDJ Key Facts
2021 Revenue $2.7 billion
Online Revenue Share 18%
Customers 30+ million

Meanwhile, Kindred is among the largest online gambling companies in Europe with major operations across Europe and Australia.

Kindred Group Key Facts
2021 Revenue $1.8 billion
Online Revenue Share 100%
Registered Customers 26+ million

By acquiring Kindred, FDJ would significantly boost its digital and international footprint as it continues shifting towards online channels.

Deal Drivers and Strategic Rationale

Industry experts cite several key factors driving FDJ’s interest in acquiring Kindred Group:

  • Online growth: FDJ generated only 18% of 2021 revenue online versus 100% for Kindred. The deal accelerates FDJ’s digital transformation.
  • International expansion: Nearly all FDJ’s current revenue comes from France, while Kindred has customers across Europe, Australia and the US.
  • Regulatory changes: Shared regulation and headwinds in major markets are leading to consolidation in online gambling.
  • Synergies: Cost and revenue opportunities from combining operations and leveraging brands across regions.

In a conference call, FDJ’s CEO cited Kindred’s “best-in-class gambling platform and product portfolio” and emphasized the significant long-term growth potential from combining the companies.

Meanwhile, Kindred’s board likely sees the all-cash offer at a substantial premium as providing good value for shareholders. The deal would also give Kindred improved financial backing as regulations tighten in key markets like the UK and Netherlands.

What Happens Next for the Deal

The bid sets up further talks between the two companies as Kindred’s board evaluates the offer and FDJ conducts due diligence.

Several steps remain before the deal can be completed:

  1. Kindred Board Review: The board will thoroughly assess the offer and provide a recommendation to shareholders. This process takes 2-3 months typically.
  2. Shareholder Approval: Assuming board approval, Kindred shareholders would vote whether to accept the offer. Approval requires acceptance from owners of at least 90% of shares.
  3. Regulatory Approvals: The deal requires clearance from competition authorities and gambling regulators in multiple jurisdictions which could take 6-12 months.
  4. Integration Planning: If successful, FDJ would then begin the substantial task of integrating Kindred’s operations, brands, technology and people.

Experts consider the deal likely to ultimately win the necessary approvals presuming no counterbids. While FDJ faces a long road ahead, the deal stands as a defining moment in its transformation into a digital global gambling leader if completed as planned.

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AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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