Lottomatica, CIRSA Gaming Merger Creates European Powerhouse

In a significant consolidation move within the European gaming sector, Lottomatica and CIRSA have agreed to an all-share combination that will establish a formidable new entity. This strategic union is set to create the world's second-largest publicly traded gaming and sports betting operator, projecting an impressive pro forma Adjusted EBITDA of approximately €2 billion. The transaction, structured as an EU cross-border statutory merger, will see CIRSA absorbed by Lottomatica, which will continue as the surviving company. This development signals a major shift in market dynamics, particularly in the highly competitive Italian and Spanish markets where the combined group will hold dominant positions.

The newly formed powerhouse will command leading market shares in both Italy and Spain, alongside nine other market leadership positions across a combined addressable market valued at an estimated €34 billion. This scale is expected to unlock substantial operational efficiencies and revenue growth opportunities. Anticipated pre-tax cash synergies, driven by operating expense reductions and interest savings, are pegged at approximately €115 million annually, achievable within three years post-completion. Furthermore, the merger is designed to accelerate CIRSA's online expansion by leveraging Lottomatica's advanced digital and omnichannel capabilities, a critical advantage in today's increasingly digitalized gaming environment.

Under the terms of the agreement, CIRSA shareholders will receive 0.668 newly issued Lottomatica shares for each CIRSA share they hold. This exchange ratio will result in existing Lottomatica shareholders retaining an estimated 67.5% ownership of the combined entity, while CIRSA shareholders will hold approximately 32.5%. A key stakeholder in this transaction is Blackstone, which backs CIRSA and is expected to emerge as the largest individual shareholder with a stake of around 24%. This significant holding underscores Blackstone's strategic commitment to the combined group's future success.

Prior to the merger's finalization, CIRSA plans to distribute an extraordinary dividend of €262 million, equating to €1.56 per CIRSA share. Following the completion of the merger, Lottomatica's board intends to propose further capital returns totaling approximately €744 million. These returns could be executed through a special dividend, a voluntary partial tender offer, or a combination of both. The combined company anticipates a robust capacity for capital returns, potentially reaching up to €4 billion over the three years subsequent to the merger's completion, subject to board and shareholder approvals, signaling a strong focus on shareholder value.

The merged entity will operate under the established Lottomatica name, maintaining its headquarters and tax domicile in Rome, Italy, while CIRSA will retain a secondary headquarters in the Barcelona region of Spain. Guglielmo Angelozzi will lead the combined company as Chairman and CEO, supported by Laurence Van Lancker as CFO and Deputy CEO. Antonio Hostench will continue as CEO of CIRSA, and Antonio Grau will remain CIRSA’s CFO. Blackstone will have the right to appoint two directors to the combined company's 13-member board, pending shareholder approval. The transaction is anticipated to close in the second quarter of 2027, contingent upon securing necessary shareholder and regulatory clearances, including antitrust and gaming approvals.