FDJ Makes $2.8 Billion Offer for Kindred to Form New Gaming Powerhouse

French gaming firm Francaise des Jeux (FDJ) has announced a blockbuster $2.8 billion takeover bid for Swedish online gaming company Kindred Group.The deal would unite two major players to create a new leader in Europe's rapidly consolidating gaming industry.

Generous Offer at Significant Premium

FDJ is offering 130 Swedish crowns ($12.43) in cash for each share of Kindred, valuing the company at an enterprise value of 2.6 billion euros ($2.83 billion).This represents a premium of around 24% over Kindred's closing share price on January 19.

Kindred's board has unanimously recommended that shareholders accept the attractive offer, which follows a strategic review that examined options, including mergers and an outright sale.

The sizable premium reflects Kindred's future growth potential while providing shareholders with a compelling exit price.

Kindred shares surged nearly 17% on news of the deal, while FDJ's stock rose 4% as investors welcomed the move.FDJ highlighted that acquiring Kindred would establish the combined entity as the second-largest gaming operator in Europe.

The union of FDJ, which mainly offers lottery products and scratch cards through its retail network in France, and Kindred, a specialist in online casinos and sports betting, would create a more diversified gaming powerhouse.

The merged company would boast strength across the high-growth online segment where Kindred excels, as well as FDJ's extensive offline retail footprint.

This diversity across distribution channels and product verticals should drive revenue growth and provide resilience. FDJ CEO Stephane Pallez stated the deal will enable significant value creation" for the shareholders and stakeholders of both organizations.

FDJ estimates Kindred's contribution will boost its earnings per share by over 10% and lead to higher dividends. The transaction is expected to be immediately accretive, generating attractive returns exceeding FDJ's cost of capital within just a few years post-acquisition.

Cost and revenue synergies from integration should also enhance long-term profit growth.Kindred's board also cited recognizing the company's future growth potential as a factor in supporting the deal.

The acquisition will allow Kindred to benefit from FDJ's scale and capabilities to accelerate expansion.

Accelerating FDJ's Global Expansion Strategy

Acquiring Kindred aligns squarely with FDJ's strategic priority of driving international expansion, especially in online gaming.FDJ recently acquired a stake in US sports betting platform FanDuel to gain a foothold in the fast-growing American market.

Obtaining Kindred will provide FDJ with an established platform, expertise, and brand recognition in core online casino and sportsbook verticals.This will allow FDJ to rapidly build its presence across Europe and beyond in high-potential regulated online gaming markets.

The deal signals FDJ's appetite for transformative deals to hasten its evolution into a leading global Omni-channel gaming operator.Kindred will provide the ideal springboard to complement FDJ's strong French retail network as it pursues ambitious overseas growth plans.

The post FDJ Makes $2.8 Billion Offer for Kindred to Form New Gaming Powerhouse appeared first on The Tech Report.