La Francaise des Jeux (FDJ), the operator of the French national lottery, made a significant move by acquiring Kindred Group for approximately $2.67 billion. This acquisition marks a major milestone for both companies as they aim to create the largest company in Europe within the online gambling industry.
FDJ’s international expansion has been a key focus, and the acquisition of Kindred is the next step in this strategy. Kindred, which is listed for sale in Stockholm, was previously owned by Corvex Management, a New York-based investment firm led by Keith Meister. The deal will see FDJ pay 27.95 billion Swedish kronor, with all shareholders receiving 130 Swedish kronor for each share they own.
FDJ is already a leading player in the French lottery and offline sports betting market. In addition to its retail betting services, the company also offers online sports betting and gambling. In the second half of 2023, the company reported a 6% increase in revenue, resulting in a profit of nearly €1.3 billion (US$1.3 billion).
The acquisition of Kindred positions FDJ for further international expansion, following its recent acquisition of Premier Lotteries Ireland. With Kindred’s acquisition, FDJ will have a strong presence in key European markets such as the UK, France, Italy, the Netherlands, Sweden, and Australia.
Kindred, founded in 1997, has developed a portfolio of nine gambling brands, including Unibet, a leader in sports betting, casino games, poker, and bingo, as well as Highrollers, catering to high-stakes players. The company recently shifted its focus to the European market, discontinuing its operations in North America to redirect its resources to this key market. This strategic decision, however, led to a significant decrease in quarterly earnings and stock prices, with a 30% decline due to decreased revenue.
Corvex Management, the largest shareholder of Kindred, has been driving for changes within the company, and a majority of the board has supported these efforts. This move comes at a time when several European companies have experienced dips in stock prices and revenue. Corvex also disclosed a more than 4% stake in Entain, with Ricky Sandler, CEO of Eminence Capital, joining the board to address the challenges faced by the company.
Overall, the acquisition of Kindred by FDJ represents a significant development in the European online gambling industry, positioning the combined entity as a major player in the market.