In a deal valued at $5.4 billion, French entertainment company Banijay Group said on Tuesday that it is purchasing the bulk of German sports betting behemoth Tipico Group from CVC Capital.

In addition to paying cash for Tipico, the buyer intends to combine it with its Betclic division to form one of the largest iGaming and sports betting businesses in Europe. According to Banijay, the merger will result in the fourth-largest sports betting company in Europe.

"Banijay Gaming – which would double in revenue, adjusted EBITDA and free cash-flow and regroup three strong brands: Betclic, Tipico and Admiral generated €3.0 billion in revenues, €854 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and €716 million in adjusted free cash flow in 2024, on a pro forma basis. Together, they serve almost 6.5 million unique active players annually, operate more than 1,250 betting shops in Germany and Austria and employ 5,300 employees,” according to a statement issued by the Paris-based company.

Rumor circulated last year that the private equity group valued its Tipico interest at $3.75 billion, making the purchase price a major victory for CVC.

Banijay's Intriguing Geographic Exposure

Banijay is expanding its gaming portfolio with some appealing geographic exposures through what it describes as the biggest acquisition in its history.

In Portugal and its native France, the second-biggest economy in the Eurozone, Betclic already enjoys a commanding market dominance. Ivory Coast bettors are well familiar with the brand. The acquisition increases Banijay's presence in regions including Austria, Germany, and Poland. Tipico is one of the biggest sportsbook providers in Europe.

Over "the medium term," the buyer estimated that the acquisition would save $116.36 million annually. When the deal concludes in the middle of next year, Banijay will own 65% of Tipico, with the intention of gradually increasing that ownership to at least 72%. The creators of Tipico and Betclic are anticipated to stay long-term investors in Banijay.

For nine years, CVC has owned the majority of Tipico.

Tipico has already sold its US operations.

Since Tipico sold its US business to MGM Resorts International's (NYSE: MGM) LeoVegas Group unit in June 2024 for an unknown sum, US exposure is not a factor in the Banijay/Tipico merger.

The buyer's goal in that transaction was not so much to attract sports betting customers as it was to add technology. Tipico closed its US sports betting business as a consequence of the deal.

With the Banijay acquisition, CVC is drastically lowering its exposure to sports betting, even though it will still own a portion of Tipico. In the past, speculations about mergers and acquisitions in European sports betting have frequently included the private equity firm.