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The FDJ's Rise from National Lottery to Big Industry Bidder
By Shane Addinall Jan 29, 2024 IndustryExplore the fascinating journey of La Française des Jeux (FDJ), from its humble beginnings as a national lottery to its ambitious bid for the Kindred group. Uncover how this evolution shapes the landscape of the gaming industry.In the dynamic igaming world, where futures and fortunes can change with a dice roll or a card draw, one company has stood the test of time - La Française des Jeux (FDJ).
Evolving from a national lottery into a powerhouse in the gaming industry, FDJ has not only become a household name in France but is now making headlines globally with its ambitious bid to acquire the Kindred group.
Join us as we delve into the fascinating journey of FDJ, exploring its roots, strategic moves, and the significance and ripple effects of its latest venture.
FDJ: A Brief Overview
La Française des Jeux, commonly known as FDJ, began its journey in 1933 by creating the National Lottery in France. Although initially established to support war veterans, the lottery laid the foundation for what would eventually become a gaming giant.
Over the years, FDJ diversified its offerings, embracing the digital age in the '80s, introducing innovative games like "Tac. Tac," and venturing into sports betting in 1985.
From Lottery to Kindred Bid: A Remarkable Evolution
The journey of FDJ from orchestrating a national lottery to spearheading a multi-faceted gaming enterprise is nothing short of extraordinary. In its early years, the National Lottery, initiated in 1933, symbolised a commitment to societal contributions. In the '70s, FDJ introduced LOTO, a game allowing players to choose their numbers, marking a significant departure from traditional lottery formats.
The '80s and '90s witnessed FDJ's digital transformation, embracing technology with a computerised solution capable of processing 500 transactions per second. Innovations like the scratch game "Tac. Tac" and the launch of sports betting in 1985 showcased FDJ's adaptability and foresight. By 1991, as France Loto became La Française des Jeux, the company expanded its portfolio with games like "Millionaire" and established its Corporate Foundation, emphasising its commitment to sports sponsorship.
As the new millennium unfolded, FDJ ventured into online gaming by creating fdjeux.com in 2000. The launch of Euromillions in 2004, the opening of sports betting to competition in 2010, and the sponsorship of cycling teams demonstrated FDJ's continuous innovation and commitment to diverse gaming experiences.
A Bold Move: FDJ's Bid for Kindred
The pinnacle of FDJ's evolution emerges in its recent bid for the Kindred group, a Swedish-based online gaming giant. Valued at €2.6 billion, this aggressive move positions FDJ to become the second-largest gaming company in Europe. The 130 Swedish crowns per share offer represents a 24.4% premium over Kindred's January 19 closing price.
Stéphane Pallez, FDJ Group Chairman and CEO, commented:
Quote"Given their respective histories, strategic strengths, and core values, FDJ and Kindred are highly complementary, and I will be delighted to welcome Kindred’s management team and many talented individuals into the combined Group following this transaction."
Kindred's board has unanimously recommended the offer, emphasising its recognition of Kindred's long-term growth prospects. Five major Kindred shareholders, holding 27.9% of the capital, have pledged their support, solidifying the bid's foundation. The tender offer, launching on February 19, signals FDJ's intent to create a "European gaming champion" with enhanced revenue and earnings growth.
The Industry's Perspective: A Shift in Strategy
Industry experts view FDJ's bid for Kindred as a strategic shift, parting from its traditional monopoly in France. Ed Birkin, senior analyst at H2 Gambling Capital, notes:
Quote"It's been clear for a while that FDJ is looking to expand into new markets and out of their traditional monopoly, but this is a major step-change in their strategic shift."
Birkin highlights the acquisition's potential benefits, offering FDJ access to new products and markets, especially in the lucrative iGaming space.
However, challenges and cautioning notes are not far behind. The letter from France's major casino groups, expressing concerns about FDJ's "monopolistic advantages," underscores the potential hurdles FDJ may face on the domestic front.
A New Chapter Unfolding
FDJ’s journey from a National Lottery rooted in post-war benevolence to a formidable player in the European gaming industry is nothing short of remarkable. Their story reflects adaptability, innovation, and a commitment to responsible gaming. FDJ's bid for Kindred signifies more than a financial transaction; it represents a strategic move to redefine its role in the European gaming landscape.
As the tender offer unfolds, the gaming industry eagerly awaits the next chapter in FDJ's remarkable evolution.
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