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Lottomatica to absorb CIRSA in all-share merger creating €2bn EBITDA group

By jili tutorial · September 3, 2026

Lottomatica to absorb CIRSA in all-share merger creating €2bn EBITDA group

Transaction Overview

Lottomatica Group has signed a binding agreement to absorb CIRSA in an all-share merger, creating a combined gaming group with approximately €2 billion of pro forma adjusted EBITDA. The deal, signed on 2 September 2026, prices CIRSA at around six times its 2026 EBITDA before any synergies.

Under the terms, Blackstone — which controls CIRSA through LHMC Midco S.à r.l. — will retain a 24% stake in the merged entity rather than exiting. This makes Blackstone the largest single shareholder in the combined company.

What CIRSA Shareholders Receive

CIRSA shareholders will receive 0.668 newly issued Lottomatica shares for each CIRSA share they hold. Before the merger becomes effective, CIRSA will also pay an extraordinary dividend of €262 million, equivalent to €1.56 per share.

Once the merger is completed, Lottomatica’s board intends to propose an additional capital return of €744 million. This could be structured as a special dividend, a voluntary partial tender offer for treasury shares, or a combination of both.

Ownership and Governance

Existing Lottomatica shareholders are expected to hold approximately 67.5% of the combined company, with CIRSA shareholders holding around 32.5%. Blackstone is projected to end up with roughly 24% of the share capital and will receive two seats on a 13-member board. The remaining 11 directors will be Lottomatica’s existing board members.

Blackstone has agreed to a three-month lock-up on its holding after the merger becomes effective, subject to customary carve-outs, and has committed to vote in favour of the transaction.

Financial Terms and Valuation

On the agreed terms, CIRSA’s implied pro forma value before synergies corresponds to a 2026 EV/EBITDA multiple of approximately six times. This calculation uses CIRSA’s 2026 EBITDA of €810 million post-IFRS 16, which is the midpoint of the €800 million to €820 million guidance range the company confirmed on 30 July 2026.

Synergies Breakdown

The transaction is expected to generate approximately €115 million in annual pre-tax synergies by the third full year after completion. This figure splits into two components:

The companies estimate the operating cost element represents about 4% of the combined operating cost base, based on last-twelve-month figures to H1 2026. Achieving these savings will cost roughly €120 million, spread over three years.

Leverage and Capital Returns

Pro forma net debt to adjusted EBITDA is expected to reach 2.7 times at H1 2027, before deleveraging towards a steady-state target of 2.0 to 2.5 times. Both the CIRSA extraordinary dividend and the €744 million capital return will be funded from existing cash and committed debt, with a bridge facility from existing syndicate banks underwriting the transaction-related returns.

Over three years, the combined group plans to return up to €4 billion to shareholders, subject to annual approval.

Strategic Rationale and Market Position

The Digital Opportunity

One of the key drivers behind the deal is CIRSA’s online gaming business. The gap between the two companies’ digital mix is significant. Online activities accounted for 65.3% of Lottomatica’s adjusted EBITDA in H1 2026, with a 57.9% online EBITDA margin. By contrast, CIRSA’s online share was around 13% with a margin of approximately 24%.

Lottomatica’s own online share was just 2.5% in 2017. Management is positioning the CIRSA integration as a repeat of that decade-long transformation, using the same proprietary platform, CRM stack and cross-sell approach that drove Lottomatica’s digital growth.

Market Leadership Claims

Lottomatica and CIRSA describe the combination as the second-largest listed gaming and sports betting operator globally. Their peer comparison puts the pro forma group at €1,812 million of last-twelve-months adjusted EBITDA to H1 2026 (including €101 million of run-rate synergies not yet realised), against Flutter at €2,100 million.

The ranking holds even without the synergies. On standalone figures of €914 million for Lottomatica and €796 million for CIRSA, the combined group sits at roughly €1.71 billion — still ahead of Allwyn at €1,518 million and Entain at €1,314 million.

The combination also reshapes the business profile. CIRSA’s EBITDA mix is 53% casinos, 34% distributed gaming and 13% online and sports. Lottomatica’s is 79% online and sports. Pro forma, the group lands at 48% online and sports, 27% distributed gaming and 25% casinos. Geographically, 57% of EBITDA comes from Italy, 23% from Spain and 20% from the rest of the world.

The companies count nine number-one market positions in aggregate and say 97% of pro forma EBITDA comes from markets where they hold the leading position.

Guglielmo Angelozzi, Chairman and Chief Executive Officer of Lottomatica, said: “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.”

Conditions and Timeline

Regulatory and Shareholder Approvals

Completion depends on approval from both companies’ shareholders’ meetings and customary clearances for foreign direct investment, antitrust, the Foreign Subsidies Regulation and gaming licences. Four additional conditions apply:

The statutory creditor opposition period applicable to Lottomatica must also expire or be resolved.

CIRSA shareholders who vote against the merger have a statutory exit right under Spanish law for 20 calendar days after the general meeting, at cash compensation of €13.20 per share. This figure is the average CIRSA trading price over the three months ending on the trading day before the announcement, less any dividends or distributions paid in the meantime.

Expected Timeline

Advisors

Evercore and PJT Partners are lead financial advisers to Lottomatica, with Deutsche Bank and Mediobanca also advising. Lazard is advising CIRSA, and Barclays is advising Blackstone.

Key Transaction TermsDetail
StructureEU cross-border statutory merger; CIRSA absorbed by Lottomatica and ceases to exist
Exchange ratio0.668 new Lottomatica shares per CIRSA share
Ownership on completionLottomatica shareholders c. 67.5%; CIRSA shareholders c. 32.5%
Blackstone positionc. 24% of share capital; two of 13 board seats; three-month lock-up
Pro forma adjusted EBITDAc. €2 billion (LTM to 30 June 2026, including €101 million of operating cost run-rate synergies)
Annual cash synergiesc. €115 million pre-tax, by the third full year post-completion
Cost to achievec. €120 million over three years after completion
CIRSA extraordinary dividend€262 million (€1.56 per share), paid before effectiveness
Post-completion capital return€744 million
Three-year capital returnsUp to €4 billion, subject to annual shareholder approval
Implied CIRSA multiplec. 6x 2026 EV/EBITDA before synergies
Exit right compensation€13.20 per CIRSA share
Pro forma net leverage2.7x at H1 2027, against a 2.0–2.5x steady-state target
Dividend policy30% of adjusted net profit
Combined addressable marketc. €34 billion (H2 Gambling Capital, August 2026)
HeadquartersRome, with a secondary CIRSA headquarters in Barcelona province
ListingsEuronext Milan retained; admission to the Spanish Stock Exchanges on completion
Expected effectivenessQ2 2027