Lottomatica-Cirsa all-share merger creates €2B EBITDA gaming giant

Lottomatica and Cirsa Enterprises agreed to an all-share merger that will fold the Spanish operator into its Italian rival, creating the world's second-largest listed gaming and sports-betting company with roughly 2 billion euros of pro forma adjusted EBITDA and more than 4.4 billion euros of annual revenue. Cirsa shareholders receive 0.668 new Lottomatica shares for each share held, an exchange ratio that values Cirsa at about 2.8 billion euros ($3.2 billion) and hands Lottomatica investors 67.5 percent of the combined group.

"This transaction reflects the significant progress made by Cirsa in recent years and brings together two highly complementary organizations, united by shared values, strong brands and a commitment to innovation," Lionel Assant, global co-chief investment officer at Blackstone and vice-chairman of Cirsa's board, said. The merger will create one of the world's leading listed gaming platforms, benefiting from greater scale, broader geographical diversification and enhanced capabilities, he added.

Blackstone, which controls Cirsa through LHMC Midco, will hold about 24 percent of the enlarged company, making it the largest single shareholder. The exchange ratio, based on Lottomatica's Sept. 1 closing price of 24.77 euros, implies about 16.55 euros per Cirsa share, a roughly 21 percent premium to the Spanish company's close the prior day. Markets split on the terms: Lottomatica shares fell 10 percent to 22.38 euros, their lowest since March 3, while Cirsa jumped 15.1 percent to 15.70 euros, even as the FTSE MIB and Spain's IBEX 35 each edged up about 0.2 to 0.3 percent.

The deal consolidates two of Europe's largest regulated gaming businesses into a single platform spanning Italy, Spain and Latin America, where Cirsa runs casinos, slots and online betting. Lottomatica, the leading operator in Italy with a fast-growing digital arm, reported 856 million euros of adjusted EBITDA in 2025, up 21 percent, and adjusted net profit of 369 million euros, up 45 percent. Cirsa posted 637 million euros of operating revenue and 202 million euros of operating profit in the second quarter, with operating profit up 8.3 percent year over year and online gaming and sports-betting revenue up 14.9 percent.

A 6x multiple that tests the market

The price tag is the crux of investor debate. Cirsa's implied valuation reflects a fiscal 2026 EV/EBITDA multiple of about 6 times before cost savings, a level Jefferies called undemanding even as the brokerage cautioned that Lottomatica shareholders may need convincing about the benefits of Cirsa's land-based and Latin American exposure. The companies project 115 million euros of annual pretax cash savings, to be realized by the end of the third full financial year after closing, alongside shareholder returns of up to 4 billion euros in the three years following completion.

The structure carries a heavy payout component. Before the merger takes effect, Cirsa will distribute an extraordinary dividend of 262 million euros, or 1.56 euros per CirsaA share, to its shareholders. Once corporate and regulatory formalities are complete, Lottomatica's board will seek approval for a further 744 million euros of capital returns, delivered through a special dividend, a voluntary partial public takeover offer for its own shares, or a combination of both.

Regulatory path to a Milan-Madrid listing

The combined company keeps the Lottomatica name, with its registered office in Rome and a secondary office for Cirsa in the province of Barcelona, where the Spanish group is headquartered. Shares, including the newly issued stock allocated to Cirsa holders, will remain listed on Euronext Milan and, on completion, gain admission to the Spanish exchanges, giving the enlarged group a dual listing and a larger free float with greater liquidity.

Closing is expected in the second quarter of 2027, subject to shareholder and regulatory approvals across the two jurisdictions. The deal arrives soon after Cirsa's public-market debut and lets Blackstone retain meaningful exposure through its stake in the listed vehicle rather than exiting outright. If approvals clear on schedule, the combined operator will rank behind only Flutter Entertainment among listed gaming companies globally, a scale that could pressure smaller European rivals to seek their own consolidation as regulated markets tighten and online competition intensifies.

This article is for informational purposes only and does not constitute investment advice.