FDJ Aims Big with Kindred Group Acquisition
France's top lottery and offline sports betting giant, La Française des Jeux (FDJ), is making waves in the online gambling sector. The Wall Street Journal reports that FDJ is edging closer to acquiring Kindred Group, a Stockholm-listed company valued at over $2.1 billion. This strategic move is set to establish FDJ as one of Europe's largest online gambling entities.
FDJ's Global Expansion Strategy
FDJ has been actively expanding internationally, with its acquisition of Ireland's Premier Lotteries Ireland in November 2023 for €350 million ($381.6 million). The potential acquisition of Kindred Group aligns perfectly with FDJ's global ambitions, offering a diversified revenue stream and enhanced competitiveness against industry giants like Entain and Flutter Entertainment.
Kindred Group's Portfolio and Market Exit
Founded in 1997, Kindred Group manages nine renowned gambling brands, including Unibet and Highroller, serving customers in over 100 countries. Kindred's decision to exit the North American market and refocus on core European markets has paved the way for FDJ to extend its influence in key regions such as the UK, France, Italy, the Netherlands, Sweden, and Australia.
Corvex Management's Role in the Acquisition
New York-based hedge fund Corvex Management, which holds a 15% stake in Kindred, has been a driving force behind the acquisition. Corvex initiated its involvement in April 2022, urging Kindred to explore strategic alternatives to enhance shareholder value. The hedge fund's efforts gained momentum as Kindred faced a 30% decline in quarterly revenue, leading to a reconsideration of its services in the Netherlands.
A Shifting Landscape in the Gambling Industry
The European gambling sector has recently seen increased activism from investors. Corvex's involvement in the Kindred deal, along with its disclosure of a 4% stake in Entain in December, underscores the importance of companies exploring all options to boost their stock value.
Anticipated Impact on Financial Markets
The FDJ-Kindred deal is expected to send shockwaves through financial markets, potentially impacting investors and stock prices. Despite challenges in the lottery segment during Q3 2023, FDJ's strategic acquisitions, including the impending Kindred acquisition, are poised to strengthen its portfolio and offset losses.