FDJ and Kindred Must Maintain Separate Brands

French Competition Regulator Mandates Brand Separation in FDJ’s €2.45bn Acquisition of Kindred Group

The French competition regulator has intervened in the acquisition of Kindred Group by La Française des Jeux (FDJ), demanding strict conditions to safeguard market competition. As FDJ moves forward with its €2.45 billion bid to acquire Kindred, France’s competition watchdog, the Autorité de la concurrence, has set clear guidelines to ensure the deal does not harm competitive dynamics in the gambling sector. By insisting that FDJ and Kindred maintain separate brands, the regulator aims to prevent conglomerate effects that could unfairly advantage the state-owned operator in both monopoly and competitive markets. Discover how these regulatory conditions could reshape the landscape of Europe’s gambling industry.

French Regulator Demands Brand Separation in FDJ’s Acquisition of Kindred Group

France’s competition authority, the Autorité de la concurrence, has issued a directive to La Française des Jeux (FDJ), requiring the operator to keep the Kindred Group brands distinct from its own following its high-profile acquisition. This move is part of broader efforts to maintain fair competition in the French gambling market, as FDJ’s growing presence raises concerns about market dominance.

In January, FDJ launched a €2.45 billion bid to acquire Kindred, setting the stage for the creation of Europe’s second-largest gambling operator. Following the offer, Kindred encouraged its shareholders to approve the acquisition, highlighting it as the most favorable outcome after a strategic review initiated in April 2023. The transaction received swift approval from Sweden’s Financial Market Supervisory Authority in February, paving the way for the next steps.

Competition Regulator’s Concerns and Conditions

However, the French competition regulator has weighed in with specific conditions that must be met for the acquisition to proceed. The authority raised concerns that FDJ’s previous acquisition of ZEturf, completed in October 2023 for €175 million, already significantly boosted FDJ’s position in the horse racing betting sector. The regulator argued that this deal was likely to pose risks to competition through conglomerate effects, given the integration of ZEturf’s operations alongside FDJ’s existing offerings.

To address these concerns, the regulator previously demanded that FDJ commit to several measures to separate its monopoly activities from its competitive market operations. FDJ holds a monopoly on online and land-based lottery games, including draw games and scratch cards, and has exclusive rights to land-based sports betting. However, it also operates in a competitive market for online horse racing, sports betting, and poker.

The acquisition of Kindred, known for its strong presence in online betting and poker, introduces additional complexities. The regulator pointed out that Kindred’s activities are similar to those of ZEturf and that merging these operations could create a scenario where FDJ would leverage its monopoly status to cross-sell competitive products, potentially distorting the market.

FDJ’s Commitments to Maintain Competition

In response to these concerns, FDJ has agreed to reinforce its existing commitments and introduce new measures specifically addressing the acquisition of Kindred. The operator has pledged to maintain brand separation, ensuring that Kindred’s competitive games are marketed under distinct brands that do not share any logos or naming conventions with FDJ’s monopoly games, such as the FDJ or Parions Sport brands.

The regulator’s mandate aims to prevent FDJ from creating commercial links between its monopoly games and Kindred’s offerings, which could result in unfair market advantages. By separating its competitive and monopoly activities, FDJ will uphold fair market practices and adhere to the regulatory guidelines designed to protect the integrity of the gambling market in France.

The French competition regulator’s decision to enforce strict brand separation in FDJ’s acquisition of Kindred Group reflects the ongoing efforts to balance growth and fair competition in the European gambling industry. FDJ’s commitment to these regulatory demands not only clears the path for the acquisition to proceed but also sets a precedent for how dominant operators must navigate market dynamics when expanding their portfolios. As FDJ and Kindred move forward under these new terms, the industry will be closely watching how these changes impact the broader European gambling landscape.