La Française des Jeux (FDJ), France’s national lottery operator, announced that it has reached an agreement with ZEturf Group, the second-largest horse racing operator in the country. This follows an announcement from two months ago when FDJ announced that it is eyeing an M&A deal with the racing specialist.
FDJ and ZEturf Group Reached an Agreement
In September, FDJ said that it has begun negotiations for the acquisition of ZEturf Group. The deal was in line with the former company’s ambitions to expand its presence by exploring other verticals, such as poker and horse racing. Two months later, it looks like the two parties have finally reached an agreement.
As announced by the French lottery giant today, it is set to acquire the horse racing operator in a $181 million deal. This means that FDJ will soon grow its range of products, expanding towards the racing sector. ZEturf, which was founded in 2001, currently has around 100 employees and annual revenue of several dozen million Euros. For example, in 2021, the company earned almost $51.6 million (current conversion rates).
Other than the agreed $181 million, FDJ may be also required to pay additional consideration depending on ZEturf’s performance in the following year. As announced in FDJ’s official release, the transaction will be accretive for the contribution margin of FDJ’s Sports Betting & Online Gaming BU from 2024.
The deal is expected to be finalized in the second half of 2023 and is subject to regulatory approval by the French Competition Authority.
FDJ Continues to Seek Expansion Opportunities
Emmanuel de Rohan-Chabot, ZEturf Group’s founder, spoke about the deal with FDJ. He said that the merger will “mark a new stage” of development for his team. He noted that the agreement will bring together the strengths of FDJ and ZEturf, which he believes will complement each other well.
De Rohan-Chabot added that this is a great opportunity for ZEturf’s workers to become a part of something bigger and demonstrate their abilities.
Stéphane Pallez, FDJ Group’s chair and chief executive, also commented on the acquisition. She said that she is delighted that her company reached an agreement with ZEturf Group, which she considers to be a leader in online horse racing wagering. Pallez noted that FDJ will continue its effort to cement itself as a gambling powerhouse in the French market.
With this transaction and the launch of our poker range, which together strengthen our growth prospects, FDJ is optimally positioned to become a major player in the French market for online games open to competition, while remaining true to our recreational, responsible and redistributive gaming model.
Stéphane Pallez, CEO, FDJ
A month ago, FDJ published its Q3 financial results, highlighting the company’s performance in the three months ended September 30.