The French national lottery operator La Francaise des Jeux (FDJ) has made a major move in the online gambling industry, acquiring Kindred Group for approximately $2.67 billion. This acquisition is set to propel both companies to the forefront of the European online gambling market, marking a significant milestone for their expansion.
The deal, which is close to being finalized, sees Kindred being sold in Stockholm, listed by Corvex Management from New York, led by Keith Meister. FDJ will pay 27.95 billion Swedish kronor, with all shareholders receiving 130 Swedish kronor for each share they possess.
FDJ, a leading lottery and offline sports betting company in France, has seen a 6% increase in profits, amounting to nearly €1.3 billion (US$1.3 billion) in the second half of 2023. This acquisition of Kindred will pave the way for FDJ’s international expansion, following the recent acquisition of Premier Lotteries Ireland. It will enable FDJ to expand across key European markets such as the UK, France, Italy, the Netherlands, Sweden, and Australia.
Kindred, founded in 1997, has grown to a value of more than $2.1 billion. The company operates nine gambling brands, including Unibet, known for its leadership in sports betting, casino games, poker, and bingo releases, as well as Highrollers, catering to players willing to make larger bets.
The decision for Kindred to focus on the European market and withdraw from North America has been a strategic move to redirect funds to this crucial market. However, the temporary suspension of operations in the Netherlands led to a significant decrease in quarterly earnings and a 30% decrease in stock price due to reduced revenue. The acquisition by FDJ is seen as a way to increase revenue and stock price.
Corvex Management, the largest shareholder in Kindred, has been instrumental in pursuing these changes, with the majority of the board in agreement. Similar challenges have been faced by other European companies, with decreased stock prices and revenue. Corvex recently disclosed more than a 4% stake in Entain, with Ricky Sandler, CEO of Eminence Capital, joining the board to find the best solutions.
This acquisition signals a significant shift in the European online gambling industry and sets the stage for further expansion and growth for both FDJ and Kindred.