Lottomatica Group and Blackstone have agreed the principal terms of an all-share transaction that will bring Spanish gaming company CIRSA into the Italian operator. The cross-border merger would create a larger gaming and sports betting group with established positions in both Italy and Spain.

Lottomatica informed the Borsa Milan that it plans to absorb CIRSA through a merger by incorporation. The agreement still requires approval from the respective general shareholders’ meetings, alongside the relevant regulatory and corporate clearances.

The proposed combination would produce pro forma adjusted EBITDA of approximately €2 billion based on the companies’ financial results. Lottomatica expects the enlarged group to rank among the most profitable listed gaming and sports betting operators globally.

CIRSA’s implied enterprise value, excluding synergies, corresponds to approximately six times its estimated 2026 EV/EBITDA.

Combined Scale Across Two Major Markets

The transaction brings together two companies with leading positions in their respective domestic markets. Lottomatica holds around 30% of Italy’s gaming market when its lottery business is excluded, while CIRSA has approximately 12% of Spain’s market.

Lottomatica has developed its digital business in Italy and the proposed combination would give it control of CIRSA’s Spanish operations. The companies also have different levels of online market development to work with. Italy recorded online gambling spending of €47 per capita, compared with €35 in Spain.

CIRSA has previously struggled to build an online business that matched its strength in Spain’s wider gambling market. Its Sportium joint venture with Ladbrokes was wound up in 2019 at an enterprise value of €140 million.

Regulus Partners estimated that applying Lottomatica’s experience in Italy to CIRSA’s Spanish business could generate about €350 million in additional revenue. The assessment excludes any contribution from CIRSA’s exposure to Latin American markets.

The transaction therefore gives Lottomatica access to a broader geographic base while providing CIRSA with the opportunity to draw on the Italian group’s experience in developing digital gambling operations.

€115 Million Synergy Target

According to SBC News, the merged company expects to achieve approximately €115 million in annual pre-tax cash synergies by its third full fiscal year following completion. The savings are expected to come mainly from operating and financial measures, with operating cost synergies estimated at €101 million.

Regulus Partners questioned the size of the forecast. In a note cited in coverage of the transaction, the advisory firm described the €115 million estimate as “staggeringly unambitious”.

The firm regarded the diversification created by the deal as a positive feature while describing the financial assumptions as “distinctly unexciting”. It also suggested that the actual benefits could exceed the current estimate if management commits sufficient investment to the combined operations.

Regulus warned that limited investment could leave the enlarged company as a “low-growth conglomerate with few synergies beyond comforting linguistic and cultural similarities – and just enough revenue diversification to justify the tag ‘global’ while diluting focus everywhere.”

The transaction will be financed through available cash and committed debt facilities. Following completion, net leverage is expected to reach 2.7 times adjusted EBITDA as of June 2027. Refinancing certain debt instruments is expected to produce annual interest savings of approximately €14 million.

The group intends to maintain steady-state net leverage between 2.0 and 2.5 times adjusted EBITDA and retain a dividend policy equivalent to 30% of adjusted net income. It also expects to distribute up to €4 billion to shareholders over the following three years.

Before completion, CIRSA will pay an extraordinary dividend of €262 million. Lottomatica plans to seek approval for a further €744 million capital distribution through an extraordinary dividend, share repurchases, or a combination of the two.

Ownership Structure and Management

Lottomatica shareholders will hold approximately 67.5% of the combined company, with CIRSA shareholders owning the remaining 32.5%.

Blackstone, CIRSA’s majority shareholder, is expected to become the largest individual shareholder of the enlarged group with a stake of around 24%. The investment company will also nominate two members of the 13-person board.

Lottomatica CEO Guglielmo Angelozzi, who has led the company since 2014 and became chairman in 2025, will continue in both positions. Laurence Van Lancker, Lottomatica’s CFO and deputy CEO, will also retain his roles.

As published in Lottomatica’s official release (pdf), CIRSA CEO Antonio Hostench and CFO Antonio Grau will continue overseeing the Spanish operator’s activities within the new structure. The combined company will operate under the Lottomatica name.

The existing listings in Italy and Spain are expected to remain after completion. The transaction is currently scheduled to close in the second quarter of 2027, subject to shareholder approval and regulatory clearance.