FDJ Completes mega deal: Largest gambling operator in Europe

La Française des Jeux (FDJ) has set its sights on dominating the European gambling market. And with the acquisition of Kindred Group Plc, a major player in the online gambling industry, that ambition looks set to become a reality. Kindred investors have accepted FDJ’s bid, and now that the deal is complete, the European gambling landscape is set to change forever.

The acquisition of Kindred by La Française des Jeux (FDJ) means that FDJ now becomes a dominant player in the European gambling industry. FDJ has acquired over 90% of Kindred’s shares for €2.5 billion. This gives them access to new markets such as the UK, Sweden, the Netherlands, Denmark and Belgium, and adds popular brands such as Unibet and 32Red to their portfolio.

Implications of the acquisition

• Expansion in Europe: FDJ enters new regulated markets, significantly expanding their presence in Europe. Portfolio expansion: They add well-known brands, which means they are now active in almost all sectors of online gambling.
• Stronger competitive position: FDJ becomes the highest-valued gambling company in Europe, putting pressure on competitors such as Flutter Entertainment.
• Responsible gambling: Both companies remain committed to regulated and responsible gambling activities.

Last chance for a mega deal

On October 2, the clock struck for the last time for investors who still wanted to participate in FDJ’s bid. FDJ ultimately bought no less than 196 million Swedish shares in Kindred, which gave it more than 90% of the shares. This was the final piece of a takeover that had been in the making for months.

This was no small step, because Kindred had already closed a deal with the five largest shareholders, including Veralda Investments, the private fund of Unibet founder Anders Ström. They had already pledged their shares – good for 26.7% of the total value – to FDJ.

Shareholders satisfied

FDJ knew how to convince the shareholders. They made a bid of SEK 130 per share, which is about €11.50. That’s not bad, because it was 35% higher than the average value of Kindred’s shares earlier this year. No wonder that Kindred’s board of directors and CEO Nils Andén unanimously recommended it to their shareholders. The regulators also gave their blessing on September 16, so nothing stood in the way of the deal.

How FDJ is going to pay for all this?

You might be wondering: how is FDJ going to finance this mega deal of €2.5 billion? Don’t worry, they have their affairs in order. FDJ will finance the majority of the acquisition with their own cash reserves. For the rest, they will take out a bridging loan from a number of French banks. A smart move, because with this acquisition they will become the largest player in the European gambling market. Competitors such as Flutter Entertainment, who recently moved to the New York Stock Exchange, will be amazed. 

A foot in the door in new markets

With Kindred in their hands, FDJ can now also focus on markets where they were previously not active. Think of the UK, Sweden, the Netherlands, Denmark and Belgium. More importantly, they remain fully committed to legal, regulated markets, something that both companies value highly.

In a statement, FDJ said that this acquisition creates a “European champion” with a wide range of activities. They now have a strong position in monopoly activities such as lotteries in France and Ireland, but also in online sports betting and gaming in other European countries.

More brands and more market share

The acquisition also means that FDJ can now play in all corners of the online gambling world. They are acquiring major brands such as Unibet, 32Red, Bingo.com and Maria.com. In addition, Relax Gaming, a popular gaming studio, is also coming under their wing. This is not only an expansion of their portfolio, but also a step towards the future of online entertainment.

The numbers don’t lie: in the first half of the year, Kindred generated revenues of £635 million and EBITDA of £132 million. This was despite the fact that they were already working on cost savings in preparation for the acquisition. This bodes well for the future.

FDJ strengthens its position

Stéphane Pallez, CEO of FDJ, was visibly proud when she announced the acquisition. 

“I am extremely pleased to be acquiring Kindred, a leading player in the competitive online gambling sector. Their strong brands and technological edge will only strengthen FDJ.

Both FDJ and Kindred have high standards when it comes to responsible gambling. We combine performance with responsibility, and with this acquisition we are creating a new European champion. A champion that is committed to sustainable growth and profitability, for everyone involved.”

Stéphane Pallez, CEO of FDJ

The European gambling world will look very different from now on, and with FDJ at the forefront, the game will be played at a high level.