Reading Time: 2 minutes
The French government will start groundwork for the divestment of its national lottery operator Francaise des Jeux as soon. The national airport operator Aeroports de Paris SA (ADP) and energy provider Engie SA will also be divested. The government now has 72 per cent stake in the lottery operator.
The sale of the three companies is expected to generate €15 billion for the state. The money is planned to be used for setting up and bulking a government fund for innovation and investment in various industrial projects. The establishment of the innovation fund was part of French President Emanuel Macron’s election pledges. The country’s top official was elected last spring over National Rally (formerly National Front) leader Marine Le Pen.
The privatisation of Francaise des Jeux and the other two companies cannot begin before the government passes a special bill on the matter.
The piece of legislation would clear the way for the sale of ADP and Engie by annulling a requirement under which the state should hold more than a 50 per cent stake in ADP and one-third of Engie’s total voting rights. Here it is important to note that the companies are both listed in Paris.
As for the lottery operator, it is not listed, but its privatisation will require the creation of a new regulatory body that will oversee the divestment as well as lottery operations conducted in France after the privatisation.
The legislative piece was introduced to the government on Monday, as confirmed by officials late last night. However, it will not be before the end of the summer holidays that it will be reviewed and voted on.
Record Sales amid Privatisation Preparations
Francaise des Jeux has recorded particularly strong performance and increasing sales over the past several years. Sales totaled €15.1 billion last year, up 5.7 per cent from 2016 to confirm the operator’s health ahead of its now inevitable privatisation.
The state-run entity sells scratchcards and other lottery products and also runs online lottery and betting operations. Scratchcards generated sales of €7.4 billion last year, up 8 per cent from the previous year. Other lottery products added €5.2 billion to the whole, representing a 5.2 per cent increase from a year earlier. Sports betting contributed the amount of €2.5 billion last year, up 0.3 per cent.
Here it is important to point out that Francaise des Jeux is Europe’s second-largest lottery operator, with Italy’s Lottomatica being the only one ahead.
According to previous reports from local media outlets, Francaise des Jeux is not likely to be taken public before 2019. It is believed that the state would sell around 50 per cent of the lottery operator to reduce its stake in it to just 22 per cent.
As stated by analysts, a €15-plus-billion sale of Francaise des Jeux, ADP, and Engie will represent the largest divestment wave initiated by the French state since 2004–2007 when it sold shares in the country’s former phone monopoly and launched IPOs of a major electric utility company and a gas company.
Source: European Gaming Industry News