Lottomatica Agrees All-Share Merger to Absorb Cirsa

Lottomatica Group and Cirsa Enterprises have agreed the framework and key terms of an all-share combination that will see the Italian operator absorb its Spanish counterpart through a cross-border statutory merger. The respective boards of directors entered into a binding merger agreement on September 2, 2026, alongside Cirsa’s majority shareholder, LHMC Midco, an entity controlled by funds managed by Blackstone.

Under the transaction announcement_1.pdf), the deal will be implemented as an EU cross-border statutory merger by way of absorption of Cirsa by Lottomatica. Cirsa will cease to exist as a separate legal entity without undergoing any liquidation process, and Lottomatica will continue as the surviving entity. Cirsa shareholders will receive newly issued Lottomatica shares in exchange for their holdings.

Exchange Terms and Ownership

Cirsa shareholders will receive 0.668 newly issued Lottomatica shares for each Cirsa share held. Before the merger takes effect, Cirsa will distribute an extraordinary dividend of €262 million, equivalent to €1.56 per Cirsa share, to its shareholders.

Following completion, current Lottomatica shareholders are expected to own approximately 67.5% of the combined company’s share capital, with current Cirsa shareholders holding the remaining roughly 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. Based on the agreed terms, Cirsa’s implied pro forma value before synergies corresponds to a 2026E EV/EBITDA multiple of approximately 6x.

Capital Returns and Financing

Upon completion of the relevant corporate and regulatory formalities, Lottomatica’s board intends to propose a capital return of €744 million to shareholders of the combined company, to be implemented through a special dividend, a voluntary partial tender offer for treasury shares, or a combination of both. Cirsa’s €262 million extraordinary dividend will be funded immediately before the transaction’s effectiveness, and the €744 million capital return will be funded afterward, in each case through a combination of existing cash resources and committed debt financing.

On a pro forma basis upon completion, net debt to Adjusted EBITDA as at the first half of 2027 is expected to reach 2.7x. For select outstanding debt instruments carrying a higher cost than Lottomatica’s current cost of debt, the companies expect run-rate interest cost savings of €14 million per annum, assuming refinancing at Lottomatica’s current cost of debt.

The combined company intends to maintain a pro forma dividend policy of 30% of Adjusted Net Profit, a net leverage target of 2.0 to 2.5x on a steady-state basis, and continued share buybacks in line with historical practice. Lottomatica’s board is to propose up to €4 billion of capital returns over the three years following completion, subject to annual shareholder approval.

Scale and Synergies

The companies said the combination would create the second-largest listed gaming and sports betting operator globally, with pro forma Adjusted EBITDA of approximately €2 billion based on last-twelve-months figures as of June 30, 2026. They projected roughly €115 million of pre-tax cash synergies per year from operating expense and interest cost savings, expected to be realised by the third full year after completion.

The announcement describes nine leadership positions in aggregate across the combined group’s markets, with a combined addressable market of €34 billion, citing H2 Gambling Capital data from August 2026 covering Italy, Spain, Panama, Colombia, Mexico, Peru, Portugal, and Morocco.

Governance and Management

The combined company will retain the Lottomatica name, with its registered office, headquarters, and tax domicile in Rome, and a secondary headquarters for Cirsa in Barcelona province. Lottomatica shares, including the newly issued shares allotted to Cirsa shareholders, will remain listed on Euronext Milan and, following completion, will also be admitted to trading on the Spanish Stock Exchanges.

Subject to shareholder approval, the combined company’s board will have 13 members: the existing 11 Lottomatica directors and two new directors nominated upon designation by Blackstone. Blackstone and Cirsa key management owning shares have signed undertakings to vote in favour of the combination, and Blackstone has agreed to a three-month lock-up on its shareholding following the transaction’s effectiveness, subject to customary carve-outs.

Guglielmo Angelozzi will serve as chairman and chief executive officer of the combined company, with Laurence Van Lancker as chief financial officer and deputy chief executive officer. Antonio Hostench will serve as chief executive officer of Cirsa and Antonio Grau as chief financial officer of Cirsa.

“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,” Angelozzi said.

Conditions and Timetable

Completion is subject to customary conditions precedent, including approval by the shareholders’ meetings of both companies and customary FDI, antitrust, FSR, and gaming clearances. Completion is further conditional on Cirsa shareholders validly exercising exit rights representing no more than 5% of Cirsa’s paid-up share capital, approval of Cirsa’s extraordinary dividend, completion of listing formalities on Euronext Milan and the Spanish Stock Exchanges, expiration or resolution of the statutory creditor opposition period applicable to Lottomatica, and an independent expert’s confirmation of the adequacy of the exchange ratio and the cash compensation for exiting Cirsa shareholders.

Cirsa shareholders who vote against the merger will be entitled, during a 20-calendar-day period following Cirsa’s general meeting under applicable Spanish law, to exercise a statutory exit right to sell their shares for cash compensation of €13.20 per share, less any dividends or distributions made before completion of their acquisition. That figure is the average trading price of Cirsa shares on the Spanish Stock Exchanges over the three months preceding the announcement of the merger agreement.

Extraordinary general meetings of Lottomatica and Cirsa are expected to be held by the end of 2026. Effectiveness of the proposed combination is expected in the second quarter of 2027. The companies were scheduled to host a conference call to present the transaction on September 2, 2026 at 10am CEST.