Groupe Française des Jeux has received another approval for its planned acquisition of Kindred Group, this time by France’s national competition regulator, the Autorité de la concurrence.
FDJ was given the go-ahead by the Autorité after agreeing to a brand separation commitment to market its offerings under different brands.
Back in May, the ADLC was notified by FDJ of its plans to acquire sole control of Kindred, four months after the French gambling group submitted an offer of around €2.6m for the Unibet operator in January, which was unanimously recommended by Kindred’s board of directors.
FDJ has been edging closer towards the acquisition’s completion ever since the beginning of the year, receiving approval for the deal from the Swedish Financial Supervisory Authority in February and purchasing shares in Kindred along the way.
The French operator stated within its H1 results in July that approval from the Autorité was the last regulatory condition necessary to finalise the Kindred offer. After examining the transaction, the ADLC has cleared the acquisition, subject to conditions.
FDJ has entered into behavioural remedies to address the risks of harm to competition identified.
Recognition of ZEturf acquisition
Within its competitive analysis, the Autorité recognised that it had previously given clearance to FDJ for its past acquisition of online sports and horse racing betting operator ZEturf Group in September last year.
The regulator highlighted how the ZEturf merger was “likely to give rise to risks of harm to competition through conglomerate effects, given the nexus between FDJ’s monopoly activities and ZEturf’s online sports and horse race betting activities”.
The ADLC added that the commitments which essentially “aim to separate FDJ’s monopoly activities from the competitive activities marketed by FDJ following the acquisition of ZEturf, are currently being implemented”.
Taking into account Kindred’s activity in online sports and horse racing betting as well as online poker, the Autorité believes the Kindred acquisition is “likely to present the same types of conglomerate risks”.
However, the regulator recognised that the ZEturf commitments applying to FDJ marketing offerings post the transaction “do not include Kindred’s activities and are therefore not sufficient to offset the risks raised by the new transaction”.
In a statement, the Autorité said: “While taking into account the provisions of the ongoing commitments, the Autorité considers that the Kindred acquisition entails the risk of FDJ commercially linking Unibet’s online horse race betting, online sports betting and online poker offers with its monopoly games (lottery, sports betting at points of sale).
“The new entity could be tempted to create links between the monopoly games offered by FDJ and the games offered by the target by promoting online sports and horse race betting and online poker to monopoly game players, deploying commercial offers encouraging monopoly game players to play online horse race and sports betting and online poker, maintaining confusion between the customer paths of monopoly game players and online horse race and sports betting players and online poker players, and using a single customer account for all the games offered.”
Brand separation
The Autorité outlined the commitments FDJ must undertake for the Kindred acquisition, including applying and supplementing the ZEturf acquisition commitments, as well as a brand separation commitment.
“To mitigate the risks raised, FDJ undertakes to apply and supplement the commitments made in September 2023 in connection with the clearance of the acquisition of ZEturf (Decision 23-DCC-191 of 15 September 2023),” the ADLC said.
“In addition, in response to comments made by third parties during market tests, FDJ has made a new brand separation commitment, whereby all competitive games will eventually be marketed under one or more brands specific to competitive games and not sharing a common root or logo with the FDJ or Parions Sport Point de Vente brands or any other brand under which FDJ markets its monopoly games in France.
“In light of the commitments made by FDJ, the Autorité cleared the transaction following the phase one examination.”
Kindred didn’t provide an update on the FDJ acquisition when it announced its Q2 financials in July. The operator is expected to publish its Q3 results next month on 25 October.