The Birth of a European Online Gambling Giant:

Niti998

The Birth of a European Online Gambling Giant: FDJ Acquires Malta's Kindred Group for $2.5 Billion.

In another significant deal in the gambling industry, the French state-owned lottery operator FDJ has proposed a $2.7 billion acquisition of the Swedish Kindred Group. This acquisition aims to create a leader in the European online gambling and gaming sector, with operations spanning 25 countries globally and a total revenue of approximately €3.5 billion.

FDJ has stated that the transaction will be financed through a combination of debt and equity, generating significant synergies and value creation. The board of directors of Kindred Group, headquartered in Malta, unanimously recommends its shareholders to accept the offer, which represents a 29% premium compared to the closing price on Thursday.

This development signifies a potential major shift in the online gambling industry, impacting shareholders and the entire market. As the situation unfolds, stakeholders eagerly await further updates. An industry insider shared some insights into the potential effects of the acquisition, suggesting that FDJ might use this opportunity to lobby for the opening of online casinos and slot machine markets in France. If successful, this could reshape the online gambling landscape in the country.

FDJ recently completed the acquisition of the national lottery operator Premier Lotteries Ireland, valued at €350 million (approximately $381.4 million). For several years since 2022, the New York-based activist hedge fund Corvex Management has been urging the Kindred board to hire financial advisors to explore strategic alternatives, including potential value realization through sales or business mergers.

What does this deal mean for the industry? The FDJ-Kindred transaction represents a significant consolidation in the European online gambling industry, creating the second-largest operator in the region. The deal is expected to promote the growth and diversification of FDJ's product portfolio, incorporating Kindred's online brands in France and Ireland into the lottery monopoly position. The transaction will also enhance Kindred's value and rewards for its shareholders, as FDJ's offer is 24% higher than the closing price premium. The focus of the deal will be on regulated markets, as both companies are committed to complying with the local laws and regulations of their respective countries.

Kindred Group plc (Kindred) issued a statement detailing the corporate strategic review initiated by the board in April 2023. The company continues to explore plans to enhance shareholder value, including other potential mergers or sales. The statement also confirms that FDJ will acquire all issued shares of Kindred. Prior to this announcement, media articles provided detailed insights into the strategic review process, including specific information about FDJ's potential public offering.

Samiksha

Securing a monopoly position is not an easy feat, I must say.

Ritu13

Being a giant is quite impressive as well.