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Following the deal, Cirsa will cease to exist
Two giants of European gaming, Lottomatica Group and Cirsa Enterprises, have announced a merger which they say will create the second-largest gaming company in the world with pro forma Adjusted EBITDA of €2bn.
The proposed combination will see CIRSA absorbed by Lottomatica, after which CIRSA will cease to exist with Lottomatica continuing as the surviving entity. The two companies claim undisputed leadership positions in Italy and Spain, with exposure to a diversified portfolio of highly attractive, high-growth
markets, with nine leadership positions in aggregate and a combined addressable market of €34bn.
Cirsa owns 450 gaming venues, operating more than 85,000 gaming machines, nad has around 2,300 sports betting points.
The two companies envisage €115m of highly visible pre-tax cash synergies per year from opex and interest cost savings, expected to be realised by the third full year post-completion. Blackstone and CIRSA key management owning shares in CIRSA have signed agreements with Lottomatica whereby they assumed vis-à-vis Lottomatica an undertaking to vote in favour of the proposed combination. Subject to the approval by the General Shareholders’ Meeting of Lottomatica, Blackstone will be represented on the Board of the combined company by two directors.
Guglielmo Angelozzi, Chairman and CEO of Lottomatica, said: “With the combination of Lottomatica and CIRSA, two extremely successful companies, we create the undisputed leader in Italy and Spain, among the best gaming markets globally, complemented by leadership positions in other very high growth geographies. More avenues of growth especially in online, same level of capital returns but with increased resiliency, low execution risk: this is a solid recipe and we look forward to working with Antonio and his team to continue to deliver growth and superior returns to our shareholders in the long term.”
Laurence Van Lancker, Deputy CEO and CFO of Lottomatica, said: “The merger of Lottomatica and CIRSA brings together two outstanding businesses, each with deep expertise, distinctive capabilities and a successful track record of growth and execution. We see a compelling opportunity to build on the strengths of both organisations, creating a stronger and more diversified platform with greater scale and enhanced capabilities to accelerate growth and value creation.”
Antonio Hostench, CEO of CIRSA, said: “I am delighted to embark on this exciting journey together. The combination of CIRSA and Lottomatica creates a world-class diversified gaming leader with leading positions across its core markets and significant opportunities to accelerate profitable growth. The CIRSA team is fully committed to the success of this transaction and looks forward to working alongside our colleagues at Lottomatica to unlock its full potential and build an even stronger business.”
Lionel Assant, Global Co-Chief Investment Officer of Blackstone and CIRSA Board Vice Chairman, said: “This transaction reflects the significant progress CIRSA has made in recent years and brings together two highly complementary businesses with shared values, strong brands and a commitment to innovation. The merger of CIRSA and Lottomatica will create one of the world’s leading listed gaming platforms, benefiting from greater scale, broader geographic diversification and enhanced capabilities.”
Directors have agreed the framework and key terms of a proposed all-share combination
(the “Proposed Combination”, the “Transaction”) which are set out in the binding merger
agreement entered into by and between Lottomatica, CIRSA and CIRSA’s majority
shareholder, LHMC Midco S.à r.l., which is controlled by funds managed by Blackstone
Inc. (“Blackstone”), on the date hereof (the “Merger Agreement”). (the “Combined Company”), with CIRSA shareholders
receiving newly issued Lottomatica shares in exchange for their CIRSA shares.
Lottomatica and CIRSA intend to commence the process for the implementation of the
Transaction as provided under the Merger Agreement through the preparation of all
relevant corporate documentation, including the approval of a joint merger plan by the
respective Boards of Directors of the companies.
The Proposed Combination will create a global leading sports betting and gaming player,
with number one positions in Italy and Spain, and leading presence in other high-growth
markets.
Transaction Highlights
The Proposed Combination brings together two highly complementary and well-run
businesses, and presents an attractive opportunity for the shareholders of both
companies to benefit from an enhanced investment proposition:
- Creates a global gaming champion: Creates the second largest listed gaming
and sports betting operator globally, 1.
1Based on last-twelve-months Adjusted EBITDA as of 30 June 2026 for Lottomatica and CIRSA, including
€101 million of operating cost run-rate synergies. CIRSA Adjusted EBITDA includes 12 months of
contribution from recent acquisitions as of 30 June 2026.
1 - Consolidated market leadership: billion2.
- Compelling synergy case: c.
- Accelerates online growth: Leveraging Lottomatica’s proven capabilities and
omni-channel expertise to accelerate CIRSA’s online organic and inorganic
expansion across its core markets. - Strong execution capabilities: High-quality businesses run by experienced
management teams with a shared track-record of profitable growth over the last
10 years underpin low integration risk. - Attractive financial profile and capital returns: Consistent combined growth
and shareholder distributions vs. Lottomatica standalone, with up to €4 billion of
capital returns3 over the three years following completion to be proposed by
Lottomatica’s Board of Directors and subject to annual approval by the General
Shareholders’ Meeting of Lottomatica, a larger pro forma free float, and increased
liquidity.
Transaction and Ownership Structure - The Proposed Combination will be implemented, subject to approval by
Lottomatica and CIRSA’s General Shareholders’ Meetings and other conditions,
by way of an EU cross-border statutory merger, with CIRSA being absorbed by
Lottomatica. - and under
the Merger Agreement has also agreed to a lock-up in respect of its shareholding
in the Combined Company for 3 months following the effectiveness of the
Transaction subject to customary carve-outs.
2Based on H2 Gambling Capital – August 2026. Includes Onshore Online and Land-based, excludes
Lottery. Includes Italy, Spain, Panama, Colombia, Mexico, Peru, Portugal and Morocco. Excludes
Dominican Republic, Costa Rica, and Paraguay due to no available data.
3
Includes capital returns of €744 million post-closing. The statements contained herein are not guarantees
of future performance.
2 - The Combined Company will retain Lottomatica’s current name, with its
registered office, headquarters and tax domicile in Rome, Italy, and secondary
headquarters for CIRSA in Barcelona province, Spain. - Lottomatica shares, including the newly issued Lottomatica shares to be allotted
in the context of the Proposed Combination to CIRSA’s shareholders, will remain
listed on Euronext Milan (Borsa Italiana) and, following completion, will be also
admitted to trading on the Spanish Stock Exchanges. - Under the agreed terms and conditions, upon the effectiveness of the Transaction
CIRSA shareholders will receive 0.668 newly issued Lottomatica shares for each
CIRSA share held. - Prior to effectiveness of the merger, CIRSA will distribute to its shareholders an
extraordinary dividend of €262 million (€1.56 per CIRSA share). Additionally, upon
completion of all relevant corporate and/or regulatory formalities, Lottomatica’s
Board of Directors intends to propose for approval by the shareholders of the
Combined Company a capital return of €744 million to be implemented through a
special dividend, a voluntary partial tender offer for treasury shares, or a
combination of both, as determined at the relevant time. - Prior to the effectiveness of the Transaction, and subject to approval from their
respective Board of Directors and General Shareholders’ Meetings, Lottomatica
and CIRSA shareholders will each be entitled to receive their ordinary dividends4
for the 2026 financial year, which are expected to be paid in Q2 2027. If the
ordinary dividends are not paid prior to effectiveness of the Transaction, CIRSA’s
extraordinary dividend referred to above will be increased, and post-closing
dividends will be thereafter proposed by Lottomatica’s Board of Directors for
approval by Lottomatica Shareholders’ Meeting, such that shareholders receive
consistent 2026 dividend distributions. - Lottomatica Buyback Plan approved by the 2026 AGM to continue also until
closing. - Following effectiveness of the Transaction, current Lottomatica shareholders are
expected to own c. 67.5% of the share capital of the Combined Company, while
current CIRSA shareholders will hold the remaining, c. 32.5%. Blackstone,
CIRSA’s largest shareholder, is expected to become the largest shareholder of the
Combined Company with approximately 24% of the share capital.5 - Based on the agreed terms, CIRSA’s implied pro forma value, before synergies,
corresponds to a 2026E EV/EBITDA multiple of approximately 6×6.
4Calculated in line with respective current dividend policies, up to a limit of €130 million for Lottomatica
shareholders and €100 million for CIRSA shareholders.
5Based on the current outstanding shares of Lottomatica and CIRSA net of shares held in treasury.
6Based on (i) CIRSA 2026E EBITDA post-IFRS 16 of €810m, the midpoint of the €800-820m guidance
range (ii) the agreed exchange ratio of 0.668x, (iii) €262m extraordinary dividend for CIRSA shareholders,
3
Capital Structure and Financing
CIRSA’s €262 million extraordinary dividend will be funded immediately prior to the
effectiveness of the Transaction and Lottomatica’s €744 million capital return will be
funded following the effectiveness of the Transaction, in each case through a
combination of existing cash resources and committed debt financing. On a pro forma
basis upon completion of the transaction, net debt / Adjusted EBITDA as at H1-2027E7 is
expected to reach 2.7x, leaving significant headroom under the Combined Company’s
financing arrangements.
The Combined Company’s greater scale and diversification support an improved credit
profile, which could have a positive impact on credit ratings in the future. For select
outstanding debt instruments that are at a higher cost to Lottomatica’s current cost of
debt, run-rate interest cost savings of €14 million per annum are expected to be achieved,
assuming the instruments are refinanced at Lottomatica’s current cost of debt.
Dividend Policy and Capital Allocation
Following effectiveness of the Transaction, the Combined Company intends to maintain
a disciplined capital-allocation framework that balances continued investment in
profitable organic and inorganic growth, with increasing returns to shareholders.
Within that framework, the Combined Company will maintain a pro forma dividend policy
of 30% of Adjusted Net Profit8, a financial policy with a net leverage target of 2.0 – 2.5x on
a steady state basis, and will continue share buybacks in line with historical practice. The
enlarged earnings and cash flow base of the Combined Company is expected to provide
greater capacity for dividends and share buybacks, with up to €4 billion of capital returns
over the next three years to be proposed by Lottomatica’s Board of Directors for approval
by the relevant General Shareholders’ Meetings.
Governance and Management
Subject to approval by the General Shareholders’ Meeting of Lottomatica and following
the effectiveness of the Transaction, the Board of Directors of the Combined Company
will have 13 members: the existing 11 directors of Lottomatica and 2 new directors
nominated upon designation by Blackstone.
Guglielmo Angelozzi will serve as Chairman and Chief Executive Officer of the Combined
Company and Laurence Van Lancker as Chief Financial Officer and Deputy Chief
Executive Officer.
(iv) 1M VWAPs for Lottomatica and CIRSA, and (v) c.32.5% pro forma ownership for CIRSA’s shareholders
of the Combined Company.
7Based on last-twelve-months Adjusted EBITDA as at 30 June 2027 for Lottomatica and CIRSA, and including
run-rate pre-tax operating cost synergies of €101 million. Net debt pro forma for capital returns.
8As defined under Lottomatica reporting.
4
Antonio Hostench will serve as Chief Executive Officer of CIRSA and Antonio Grau as
Chief Financial Officer of CIRSA.
Management and Shareholder Commentary
Timing, Conditions Precedent and Approvals
Pursuant to the Merger Agreement, the parties will commence all the activities, acts and
formalities provided thereunder and under the applicable laws in order to implement the
Proposed Combination, including the preparation of a joint merger plan setting out the
terms of the Proposed Combination, which will reflect, to the maximum extent possible,
the terms and conditions of the Merger Agreement, and which will be approved by the
respective Boards of Directors of the two companies. The parties will also engage with
the relevant employee consultations required by the applicable laws.
5
Completion of the Proposed Combination will be subject to customary conditions
precedent, including approval of the Transaction by the Shareholders’ Meetings of both
Lottomatica and CIRSA, and obtaining customary FDI, antitrust, FSR and gaming
clearances. Completion is further conditional on: (a) CIRSA shareholders validly
exercising exit rights not representing more than 5% of CIRSA’s total paid-up share
capital; (b) approval of the payment of the CIRSA’s extraordinary dividend by the
shareholders’ meeting of CIRSA; (c) completion of all the formalities required for the
admission to listing and trading on the Euronext Milan (Borsa Italiana) and the Spanish
Stock Exchanges of the Lottomatica shares, including the newly issued Lottomatica
shares to be issued and allotted to CIRSA’s shareholders in the context of the Proposed
Combination; (d) the expiration or resolution of the statutory creditor opposition period
applicable to Lottomatica; and (e) the independent expert’s confirmation of the
adequacy of the exchange ratio of the Merger and the cash compensation to be granted
to CIRSA’s shareholders who vote against the Merger and validly exercise their statutory
exit rights.
Effectiveness of the Proposed Combination is expected to occur in Q2 2027.
Documentation
In connection with the Proposed Combination, the following documents, among others,
will be made available within the relevant terms provided by law:- The joint merger plan approved by the Boards of Directors of each of Lottomatica
and CIRSA (the “Joint Merger Plan”), along with the consolidated audited financial
statements of Lottomatica and CIRSA for the last three financial years and the
merger related interim unaudited financial statements of Lottomatica and CIRSA - The reports of the Board of Directors of each of Lottomatica and CIRSA in
connection with the Proposed Combination - The independent expert report prepared in connection with the Proposed
Combination - The notice of call of each of Lottomatica and CIRSA’s Extraordinary General
Meetings and proposed resolutions.
These documents will be available on each party’s website. Subject to definition and
finalization of all the relevant corporate documentation, EGMs of Lottomatica and CIRSA
are expected to be held by the end of 2026.
Where required under applicable laws and regulations, these documents will be
disclosed also through the authorised storage mechanism (SDIR) for Lottomatica and
through the Spanish regulator (CNMV) for CIRSA.
6
Conference Call
The management of Lottomatica and CIRSA will host a call to present the Proposed
Combination on September 2nd at 10am CEST. Supporting presentation will be made
available on the parties’ respective websites. The event can be followed: - via phone by pre-registering at the following link: Registration | Investor presentation
- via Webcast
Advisers
Evercore and PJT Partners are acting as lead financial advisors to Lottomatica and
Deutsche Bank and Mediobanca are also acting as financial advisors to Lottomatica in
connection with the Transaction, and Latham & Watkins, Paul, Weiss, Rifkind, Wharton &
Garrison and Cintioli & Associati are acting as legal counsel.
