Italian betting operator Lottomatica has agreed to acquire Spanish gaming group Cirsa in a transaction that will produce a substantially larger listed gaming and sports betting company, the two firms said Wednesday.
Under the terms of the deal, Cirsa shareholders will receive 0.668 newly issued Lottomatica shares in exchange for each Cirsa share they hold. Once the transaction is completed, current Lottomatica shareholders are projected to own 67.5% of the combined company.
Blackstone, which is presently Cirsa's principal shareholder, will hold roughly 24% of the enlarged business, making the U.S. private equity firm the single largest individual stakeholder in the new group.
The newly combined company will retain the Lottomatica name and will be publicly listed on both Euronext Milan and Spanish stock exchanges. Corporate headquarters will be based in Rome, while Cirsa operations will be managed from a secondary headquarters in Barcelona.
Management continuity is built into the structure: Guglielmo Angelozzi, who currently serves as chairman and chief executive officer of Lottomatica, will continue in those roles for the combined entity. The board will be composed of Lottomatica's existing 11 directors plus two additional directors nominated by Blackstone.
Before the merger becomes effective, Cirsa will distribute an extraordinary dividend of 262 million to its shareholders, equivalent to 1.56 per share.
The companies estimate the deal will produce 115 million in pre-tax cash synergies, with those savings expected to be realized by the third full year after deal completion. In addition, management has outlined a capital return program for shareholders of up to 4 billion through a combination of dividends and share repurchases over the three years following closing.
Context and immediate outcomes
The transaction converts Cirsa into a business unit within Lottomatica, with Cirsa being absorbed under the agreement. The share-exchange ratio and the planned extraordinary dividend are intended to address value distribution to Cirsa shareholders ahead of integration. Governance will expand to include Blackstone representation on the enlarged board, while executive leadership remains with the current Lottomatica chief.
What to watch next
- Implementation of the planned pre-tax cash synergies by the third full year after completion.
- Execution of the up-to- 4 billion shareholder return program over the subsequent three years.
- Integration of Cirsa into Lottomatica's operations and the operational role of the Barcelona secondary headquarters.