FDJ's privatization: APE opts for banks
The French APE (French State Participation Agency) has selected a group of 8 banks to advance the privatization of state-run gambling provider FDJ (Française des Jeux). Plans to sell the company through an initial public offering (IPO) were initiated in October 2018, and FDJ is currently experiencing growth in the digital sector.
Eight banks chosen for the sale
The French state's privatization of gaming company FDJ is ongoing. The French APE recently picked a consortium of eight investment banks to continue handling the sale of the provider. The participating banks include BNP Paribas, Citi, Goldman Sachs, Societe Generale, Crédit Agricole Corporate and Investment Bank, HBSC, and Natixis. CIC will also be given a joint lead partner position, while Crédit Agricole will continue as the global coordinator for placing shares with individual investors. All eight banks were chosen following a tender launched by Bruno Le Maire, the Minister of Economy and Finance on June 5.
As a result of their selection, the banks are now responsible for creating a list of measures for the upcoming IPO. This catalog must be approved by AMF (French Financial Market Authority) after preparation. The IPO is projected to be completed by the end of 2019, with the state planning to retain less than 30% stake in FDJ.
Impacts on the French market
The French state owns a 72% stake in FDJ, which it plans to transfer to a national listed company. The French government had previously approved the IPO in October 2018, and the decision was driven by French Finance Minister Bruno Le Maire based on an amendment passed by President Emmanuel Macron.
The privatization of FDJ is expected to have a profound effect on the French gambling market, possibly leading to gambling tax reforms and legalizing online casinos. ARJEL (French Online Gambling Regulatory Authority) may receive a broader regulatory mandate from the government, which could result in its potential re-branding as l'Autorité nationale des jeux.
Growth in FDJ's digital sector
Despite the current upheaval in the French gambling sector, FDJ reported strong financial results for 2018. The company's revenue increased by 4.4% year-on-year, reaching €15.8 billion. Its core lottery business grew by 1.1%, totaling €12.8 billion. Within the sports betting category, FDJ experienced a significant 21% increase in revenue, coming in at around €3 billion.
Digital bets also experienced rapid growth, with a 60.4% increase to €1.8 billion. Now, online gaming comprises 60% of all bets. FDJ's revenue from digital games skyrocketed by 45.5% to €2.4 billion. The online segment makes up over 15% of FDJ's total revenue.
New mobile app fuels digital growth
A new mobile app called "Mission Patrimoine" has significantly contributed to FDJ's digital growth. Users can access all of FDJ's draw and instant games through the app, which prompted a redesign of the company's website, FDJ.fr. Digital game revenue rose by 45.5% year-on-year, landing at €2.4 billion. The online segment now makes up more than 15% of FDJ's overall revenue.
Despite the rising online revenue, FDJ is still in the process of digitizing its product range, a project called "FDJ 2020." The company has already invested €500 million and expects to complete the restructuring work by 2020. FDJ CEO Stéphane Pallez believes the company is moving in the right direction, stating that the "well-invested" money has resulted in "good implementation of the strategy."
The planned privatization could potentially bolster the digital sector further, taking advantage of the ongoing Internet boom. However, it remains to be seen what the specific outcomes will be in the future.
Read also:
- Remaining contenders down to two in DFB's struggle versus Brazil.
- Law enforcement agencies in various metropolises plan expansive measures for May 1.
- Berlin Transport Senator Schreiner Steps Down over Doctorate Issues
- The Next Development in the DAZN/DFL Billion Euro Controversy
Source: www.onlinecasinosdeutschland.com
