Kindred will pay 196p for each 32Red share which, when taking into account an additional interim dividend of 4p, represents a 16% premium to yesterday’s closing price.

Swedish online gaming company Kindred Group has agreed a £175.6mln deal to take out its smaller UK rival 32RED PLC (LON:TTR).

The deal is the latest in a wave of betting industry consolidation as bookmakers and online gaming operators look to add additional scale to meet an increasing burden of tax and regulation.

Analysts have said the move is overdue given that Kindred – formerly known as Unibet – hasn’t made an acquisition since it bought StanJames.com back in 2015.

32Red has long been seen as a possible target for one of its bigger peers and its share price has rallied in recent weeks on renewed takeover speculation.

Under the terms of the bid, 32Red shareholders will receive 196p for each share held as well as a second interim dividend of 4p per share, although this will be paid for by 32Red and not Kindred.

In total, the offer values AIM-listed 32Red at a 16% premium compared to yesterday’s closing price of 172p.

“We have consistently and profitably grown 32Red’s market share in the regulated markets of the UK and more recently, Italy,” said 32Red’s Ed Ware.

“The management team at Kindred have a similar business philosophy to our own and we look forward to joining forces with Kindred and continuing our successful growth within the Kindred group.”

Kindred said it will fund the acquisition through a new senior debt facility with Swedbank, which has been arranged specifically for this acquisition.

The Swedish group, which is actually based in Malta, said it has already received confirmation from shareholders who hold a combined 71.1% stake in 32Red that they will accept the offer.

The offer is conditional upon Kindred gaining acceptances of more than 75%.

Kindred is one of the world’s largest online gaming and sports betting companies with a portfolio that includes the likes of Unibet, StanJames.com and bingo.com.

Shares were up 16% to 200p midway through morning trading.