Italian Lottomatica and Cirsa merge to create a global gaming and betting giant

Italian lottery operator Lottomatica has announced its absorption of Spanish firm Cirsa in a merger aimed at creating one of the world's leading betting and gaming companies. The deal, which was disclosed to Spain’s National Securities Market Commission (CNMV), will see Cirsa cease to exist as an independent legal entity, with its shares being exchanged for newly issued shares in Lottomatica. The merger is expected to take effect during the second quarter of 2027. The combined company will operate under Lottomatica’s umbrella and will hold dominant market positions in both Italy and Spain, with a notable presence in other high-growth markets. According to the joint statement released by the two firms, the new entity will become the second-largest listed operator in sports betting and gaming globally, generating around €2 billion in annual operating profits. Together, they aim to capture a market valued at approximately €34 billion. Deutsche Bank and Mediobanca have been acting as financial advisors for Lottomatica in this transaction. Cirsa shareholders will receive 0.668 new shares in Lottomatica for each share they currently hold in Cirsa. This exchange is projected to grant them roughly 32.5% ownership in the merged company. Meanwhile, Blackstone, the American private equity fund that owns the majority stake in Cirsa, will retain a significant but non-controlling interest in the new entity, holding approximately 24% of the share capital. The board of directors will consist of 13 members, with 11 coming from Lottomatica and two proposed by Blackstone. Before the merger becomes official, Cirsa plans to distribute an extraordinary dividend of around €262 million (€1.56 per share) to its shareholders ahead of the share issuance. The companies must now await approval from their respective shareholder meetings, obtain regulatory authorizations, and ensure that opposition to the merger does not exceed 5% of the capital. As of now, Blackstone holds 74.2% of Cirsa’s shares, with no other stakeholders exceeding 3%, according to CNMV records. Cirsa had gone public just over a year ago, marking a key step in its journey toward exiting Blackstone’s ownership. However, the fund will remain a major player in the new company despite not retaining control. The merger is anticipated to generate annual synergies of nearly €115 million in operating profit before taxes, primarily through cost savings and more efficient financing starting from 2031. The integration of Cirsa into Lottomatica is part of a broader strategy to strengthen the European gambling sector and compete on a global scale. Both companies have emphasized the strategic benefits of combining their operations, including expanded market reach, enhanced product offerings, and improved operational efficiencies. The move reflects growing consolidation within the industry, driven by increasing competition and evolving regulatory landscapes across Europe. The merger follows a period of rapid growth for both firms, with Cirsa having recently completed its initial public offering. Its absorption by Lottomatica marks a significant shift in the balance of power within the European gaming landscape. With the combined resources and expertise of both entities, the new company is positioned to challenge larger international players in the highly competitive global betting and gaming market. The process of finalizing the merger will involve several critical steps, including shareholder approvals and regulatory clearances. Once these hurdles are cleared, the new entity will begin integrating Cirsa’s operations into Lottomatica’s existing infrastructure. The transition is expected to be smooth, given the alignment of business strategies and complementary strengths between the two companies. As the merger moves forward, attention will focus on how effectively the combined entity can leverage its expanded capabilities to achieve its ambitious goals. The success of the integration will depend largely on the ability of management teams from both companies to work collaboratively and navigate potential challenges associated with such a large-scale operation.