Lottomatica to Absorb Cirsa in All-Share Deal, Leaving Blackstone as Biggest Investor in New Gambling Giant

The cross-border merger will eliminate Cirsa as a standalone legal entity, put roughly a third of the enlarged company in the hands of its existing shareholders and set up more than €1 billion in transaction-related capital distributions.

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Cirsa’s life as an independent listed company is set to be unusually short.

The Spanish gambling group has agreed to be absorbed by Italy’s Lottomatica in a cross-border merger that would create what the companies calculate will be the world’s second-largest listed gambling and sports-betting operator. If the deal clears shareholders and regulators, Cirsa will cease to exist as a separate legal entity and its assets and liabilities will pass to Lottomatica. Completion is targeted for the second quarter of 2027.

The mechanics of the transaction reveal more than the headline about scale.

Cirsa investors will receive 0.668 newly issued Lottomatica shares for each Cirsa share they own. That exchange ratio would leave existing Lottomatica shareholders with about 67.5% of the enlarged company and Cirsa shareholders with the remaining 32.5%.

Blackstone, which controls Cirsa through its investment structure, is expected to emerge with roughly 24%, making it the largest individual shareholder of the combined business.

Blackstone gives up control but retains considerable influence

Blackstone is not simply rolling its investment into a passive minority position. It has committed to support the transaction and, subject to shareholder approval, will be entitled to propose two directors for a 13-member board.

The other 11 seats are expected to remain with Lottomatica’s existing directors. Blackstone has also accepted a three-month lock-up on its holding following completion, subject to customary exceptions.

Control of the corporate structure, though, will clearly sit on the Italian side.

The surviving company will retain the Lottomatica name, registered office, headquarters and tax residence in Rome. Cirsa will maintain a secondary headquarters in the province of Barcelona.

Guglielmo Angelozzi, currently Lottomatica’s chairman and chief executive, is slated to hold both positions in the combined company. Laurence Van Lancker is expected to remain chief financial officer while also serving as deputy chief executive. Cirsa chief executive Antonio Hostench and finance chief Antonio Grau are due to retain leadership roles over the Cirsa business.

The enlarged Lottomatica would continue trading in Milan and is expected to obtain a Spanish listing after the merger, effectively replacing Cirsa in Spanish public markets with shares in a much larger Italian-based group.

More than €1 billion in distributions surrounds the deal

There is a substantial cash component surrounding what is formally an all-share transaction.

Before completion, Cirsa plans to distribute an extraordinary €262 million to its shareholders, equivalent to €1.56 a share.

Once the merger is completed, Lottomatica’s board intends to seek approval for another €744 million capital distribution, either through an extraordinary dividend, a partial voluntary share buyback or some combination of the two. Both payments are expected to be funded through existing cash and committed debt financing.

That puts more than €1 billion of capital distributions directly around the transaction before counting ordinary dividends.

The longer-term plan goes considerably further. Management is proposing a dividend policy equivalent to 30% of adjusted net profit and says the enlarged company could return as much as €4 billion to shareholders during the three years after completion, subject to the required annual approvals. Share repurchases are also intended to remain part of the capital strategy.

Debt will rise alongside those distributions.

Pro forma net leverage is expected to stand at about 2.7 times adjusted EBITDA around completion, before moving toward a longer-term target range of 2.0 to 2.5 times. The companies are also counting on refinancing some of Cirsa’s more expensive debt at Lottomatica’s borrowing costs, which they estimate could eventually save about €14 million annually.

Cirsa gives Lottomatica the international reach it lacked

The industrial argument rests heavily on scale and on bringing two very different geographic footprints under one balance sheet.

Lottomatica is overwhelmingly an Italian operation. Cirsa is much more geographically dispersed, with about half of its adjusted EBITDA coming from Spain, 43% from markets outside Spain and Italy, and only 7% from Italy, based on figures presented to investors.

Cirsa operates across 10 countries, with roughly 450 casinos, more than 85,000 gaming machines and about 2,300 sports-betting locations. It also holds online gambling licences in Spain, Italy, Portugal, Peru, Colombia, Panama and Mexico.

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Lottomatica brings a different profile. It reported about €2.3 billion in consolidated revenue and approximately €45 billion in wagers during 2025, with more than 2.2 million online customers and a distribution network of roughly 17,400 points of sale at year-end.

Put together, management estimates the businesses would generate roughly €2 billion in adjusted EBITDA on a pro forma basis. About 57% of the combined EBITDA would come from Italy, 23% from Spain and 20% from the rest of the group’s markets.

Nearly half would come from online gambling and sports betting, with casinos contributing about a quarter and distributed gaming the remainder.

That mix matters. Cirsa gives Lottomatica immediate exposure beyond Italy, particularly in Spain and Latin America, while Lottomatica is expected to supply technology and online expertise that management believes can push Cirsa further into digital gambling.

The companies put the addressable market across their principal territories at roughly €34 billion for 2026. Those market figures are company-presented estimates based partly on third-party industry data and have not been independently verified.

The €115 million synergy target carries execution risk

There is another number carrying much of the financial case for the deal: €115 million.

That is the annual cash synergy target management expects to reach within three years of completion. Around €101 million is supposed to come from operating savings across procurement, technology, trading and risk management, shared services and general corporate expenses. The remaining roughly €14 million is tied to lower interest costs.

Getting there is itself expected to cost about €120 million over three years.

Those savings are forecasts, not booked earnings. The merger documents caution that the synergy calculations rely on management assumptions and could differ materially from the eventual outcome. The pro forma financial information is unaudited and was not prepared as a prediction of the combined company’s future results.

That distinction is important because the planned shareholder distributions and leverage strategy place considerable weight on the enlarged group delivering the cash generation expected by management.

Cirsa investors who oppose the merger have an exit route

The transaction also gives Cirsa shareholders who oppose it an exit mechanism.

Investors voting against the merger will have 20 calendar days after Cirsa’s shareholder meeting to exercise a statutory disposal right. The starting cash compensation has been fixed at €13.20 per Cirsa share, based on the average market price over the three months preceding the public announcement.

There is an important qualification. Distributions paid before those shares are acquired — including the planned extraordinary and ordinary dividends — will be deducted from the amount.

The provision also creates a condition for the transaction itself. The merger is conditional on dissenting Cirsa shareholders exercising those rights over no more than 5% of the company’s paid-up share capital.

Regulators and shareholders still stand between agreement and completion

The signatures on the merger agreement do not make the combination inevitable.

The transaction requires approval from both companies’ shareholder meetings as well as clearances covering competition, foreign direct investment, foreign-subsidy rules and gambling regulation.

An independent expert must also confirm the adequacy of the exchange ratio and the cash compensation available to dissenting Cirsa investors. Extraordinary shareholder meetings are expected before the end of 2026, with completion targeted for the second quarter of 2027.

At Tuesday’s closing prices, financial press calculations put the implied valuation of Cirsa at roughly €2.78 billion and the premium embedded in the exchange at about 21%. Cirsa closed at €13.64, while Lottomatica ended at €24.77.

For Blackstone, the agreement changes the form of its exposure rather than ending it. The private-equity owner would move from controlling Cirsa to owning roughly a quarter of a substantially larger listed group, with board representation and considerably greater share liquidity.

For Cirsa, the change is more fundamental.

Its operations, brands and Barcelona presence may continue inside the enlarged business, but the corporate entity itself will not. The company that survives the transaction will be Lottomatica, headquartered in Rome, with Cirsa’s shareholders exchanging control of their standalone Spanish gambling group for a minority stake in a much larger multinational one.

If the required regulatory and shareholder approvals arrive, that transition is scheduled to take place by the middle of 2027.

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