Lottomatica and CIRSA agree merger to create global gaming group

Lottomatica Group and CIRSA Enterprises have agreed the framework for a proposed all-share merger that would create a substantially larger listed betting and gaming group with operations across Europe and Latin America. Announced on 2 September 2026, the transaction would see CIRSA absorbed into Lottomatica through an EU cross-border statutory merger, with Lottomatica remaining as the surviving legal entity.

The proposed Lottomatica and CIRSA merger is expected to strengthen the companies' respective positions in Italy and Spain while broadening their exposure to other markets. The enlarged company is projected to become the second-largest listed gaming and sports betting operator globally, based on pro forma adjusted EBITDA of approximately €2 billion for the 12 months ended 30 June 2026.

Lottomatica and CIRSA agree on all-share combination

Under the agreed framework, CIRSA shareholders would receive 0.668 newly issued Lottomatica shares for every CIRSA share they hold. Once the transaction becomes effective, existing Lottomatica shareholders are expected to own approximately 67.5% of the combined company while existing CIRSA shareholders would hold approximately 32.5%.

The structure is designed as an absorption merger rather than the creation of a separate holding company. CIRSA would cease to exist as a separate legal entity once the merger takes effect while Lottomatica would continue as the surviving company.

Despite the legal consolidation, CIRSA's commercial identity would remain relevant in its established markets. The combined company would retain the Lottomatica name with its registered office and headquarters in Rome while maintaining a secondary headquarters for CIRSA in the province of Barcelona.

Lottomatica shares would remain listed on Euronext Milan and, following completion, would also be admitted to trading on the Spanish stock exchanges.

Transaction creates broader international scale

The proposed combination brings together two businesses with different but complementary geographic and operational profiles. Lottomatica has a strong presence in Italy across online gaming, betting and retail gaming while CIRSA has significant activities in Spain as well as operations in several international markets.

CIRSA's business includes casinos, gaming halls, gaming machines and online operations. Its broader geographic footprint also includes Colombia, Panama, Mexico and Peru, alongside other international markets. The resulting group would therefore have considerably greater geographic diversification than Lottomatica currently has on a standalone basis.

According to the transaction materials, the combined business would have leading positions in both Italy and Spain and nine leadership positions in aggregate across its addressable markets. The combined addressable market is estimated at approximately €34 billion based on industry data cited by the companies.

This geographic diversification is one of the central strategic arguments for the deal. Rather than relying predominantly on a single national market, the enlarged group would have multiple sources of revenue and growth potential across regulated European and Latin American markets.

Financial profile and expected synergies

The financial scale of the proposed merger is significant. The combined group is expected to generate more than €4.4 billion in revenue for the relevant 12-month period, while pro forma adjusted EBITDA is projected at approximately €2 billion.

Lottomatica and CIRSA also expect the combination to create annual pre-tax cash synergies of approximately €115 million by the third full year following completion. These expected benefits are linked to operating cost efficiencies and financing-related savings rather than being presented as immediate guaranteed results.

The companies have also identified approximately €101 million of operating cost run-rate synergies within the pro forma adjusted EBITDA calculation used for the transaction announcement. As with the wider synergy projections, the companies have cautioned that such estimates depend on assumptions and future execution.

For investors, the potential balance between scale, diversification and cost efficiencies forms an important part of the investment rationale. However, the final economic outcome will depend on regulatory approvals, integration execution, market conditions and the performance of the businesses after completion.

Blackstone set to remain an important shareholder

Blackstone, through the entity controlling CIRSA's majority shareholding, has agreed to support the proposed transaction. Following completion, Blackstone is expected to become the largest individual shareholder of the enlarged Lottomatica with approximately 24% of the share capital.

The private equity group would also receive two seats on the board of the combined company, subject to the relevant shareholder approval.

The post-merger board is expected to comprise 13 directors, including Lottomatica's existing 11 directors and two directors designated by Blackstone. Lottomatica Chairman and CEO Guglielmo Angelozzi is expected to continue as Chairman and Chief Executive Officer of the combined group.

Laurence Van Lancker is expected to serve as Chief Financial Officer and Deputy Chief Executive Officer. Within CIRSA, Antonio Hostench is expected to remain Chief Executive Officer while Antonio Grau is expected to continue as Chief Financial Officer.

This governance structure is intended to provide continuity while integrating CIRSA into the larger listed organisation.

Shareholder distributions remain a major element

The transaction also includes substantial planned capital distributions.

Before the merger becomes effective, CIRSA is expected to pay an extraordinary dividend of approximately €262 million, equal to €1.56 per CIRSA share. The payment is subject to the relevant corporate approvals and forms part of the agreed transaction arrangements.

Following completion and once the necessary corporate and regulatory formalities have been satisfied, Lottomatica's board intends to propose a further €744 million capital return to shareholders of the combined company. The distribution could be structured as a special dividend, a voluntary partial tender offer for treasury shares or a combination of both.

Beyond these transaction-specific measures, management expects the enlarged company to have capacity for up to €4 billion in capital returns over the three years following completion. Those returns would be subject to the required shareholder approvals and the company's broader financial position.

The proposed combined dividend policy is expected to target 30% of adjusted net profit while the group would seek to maintain a steady-state net leverage target of between 2.0x and 2.5x.

Regulatory and shareholder approvals remain pending

Despite the agreement between the parties, the Lottomatica and CIRSA merger is not yet completed.

Completion remains subject to approval by the respective general shareholders' meetings together with various regulatory and corporate conditions. These include foreign direct investment, antitrust, foreign subsidies regulation and gaming clearances where applicable.

The transaction is also conditional on CIRSA shareholders exercising statutory exit rights representing no more than 5% of its total paid-up share capital. Under the disclosed framework, eligible CIRSA shareholders who oppose the merger may exercise the applicable Spanish statutory exit right within the specified period.

Other conditions include approval of CIRSA's extraordinary dividend, completion of the necessary listing arrangements for Lottomatica shares on the Spanish stock exchanges and satisfaction of relevant creditor and independent expert requirements.

The companies expect their extraordinary general meetings to take place by the end of 2026, subject to preparation and finalisation of the required documentation.

Expected completion in the second quarter of 2027

The proposed transaction is expected to become effective in the second quarter of 2027, assuming all required conditions are satisfied.

That timetable gives Lottomatica and CIRSA several months to complete corporate procedures, regulatory reviews, shareholder processes and the legal steps required for the cross-border merger.

The structure also allows investors and regulators to assess the transaction against the detailed merger documentation before final completion. The companies have stated that the relevant merger plan, board reports and independent expert documentation will be made available in accordance with applicable legal requirements.

For the gaming sector, the transaction represents an important effort to build greater scale within the publicly listed European market. Lottomatica brings established Italian retail and online capabilities while CIRSA contributes a diversified business spanning Spain, Latin America and other international markets.

What the merger could mean for the combined group

Strategically, the transaction could give Lottomatica a broader platform from which to pursue online expansion and international growth. CIRSA's established land-based business provides an additional operating base while Lottomatica's digital and omni-channel experience could support further development of CIRSA's online activities.

At the same time, the scale of the combination means investors will be watching execution closely. Delivering projected synergies requires effective integration while maintaining operational performance across different regulatory frameworks and business models. The projected capital returns will also depend on the group's ability to generate sufficient cash flow while maintaining its stated financial objectives.

The companies have nevertheless positioned the combination as a transaction focused on diversification, scale and long-term shareholder value rather than a simple change in ownership.

Conclusion

The proposed Lottomatica and CIRSA merger would mark a significant step in the consolidation of the European betting and gaming sector. By bringing together leading positions in Italy and Spain with CIRSA's wider international footprint, the deal would create a more geographically diversified listed group with substantial financial scale.

The proposed structure offers existing shareholders continued exposure to the enlarged business while giving CIRSA investors shares in the surviving Lottomatica entity. Blackstone would also maintain a significant position through an expected 24% stake, reinforcing the continuity of its financial involvement in the business.

With approximately €2 billion in pro forma adjusted EBITDA, expected annual pre-tax cash synergies of €115 million and potential capital returns of up to €4 billion over three years, the transaction presents an ambitious financial and strategic proposition. Nevertheless, these figures remain subject to the completion of the merger, regulatory clearances, shareholder decisions and successful execution.

For now, the Lottomatica and CIRSA merger remains a proposed transaction rather than a completed combination. Its expected second-quarter 2027 completion will depend on satisfying the legal, regulatory and shareholder conditions that stand between the agreement announced on 2 September 2026 and the creation of the enlarged listed gaming group.

FAQs

What is the proposed Lottomatica and CIRSA merger?
It is a proposed all-share cross-border statutory merger under which CIRSA would be absorbed by Lottomatica, with Lottomatica continuing as the surviving listed company.

How many Lottomatica shares would CIRSA shareholders receive?
CIRSA shareholders would receive 0.668 newly issued Lottomatica shares for each CIRSA share held under the agreed transaction terms.

What ownership split is expected after completion?
Existing Lottomatica shareholders are expected to own approximately 67.5% of the combined company while current CIRSA shareholders would hold approximately 32.5%.

What role would Blackstone have after the merger?
Blackstone is expected to become the largest individual shareholder of the combined company with approximately 24% of the share capital and would be entitled to designate two board members subject to the relevant approval.

What would happen to the CIRSA brand?
CIRSA would cease to exist as a separate legal entity after the merger becomes effective, while its brand and operating activities could continue in its established markets within the broader Lottomatica group structure.

How large could the combined company become?
The companies expect the enlarged group to generate more than €4.4 billion in revenue with pro forma adjusted EBITDA of approximately €2 billion for the relevant 12-month period.

What synergies are expected from the merger?
Lottomatica and CIRSA expect approximately €115 million in annual pre-tax cash synergies by the third full year after completion.

Will shareholders receive additional capital distributions?
CIRSA is expected to distribute an extraordinary dividend of approximately €262 million before completion. Lottomatica also intends to propose a €744 million capital return after completion subject to the required approvals.

When is the merger expected to close?
The proposed combination is expected to become effective in the second quarter of 2027, subject to shareholder approval and regulatory and other closing conditions.

Does the merger require regulatory approval?
Yes. Completion is subject to several conditions including shareholder approvals, antitrust, foreign direct investment, foreign subsidies regulation and gaming clearances as applicable.