Lottomatica tumbles after agreeing all-share merger with Cirsa

(Sharecast News) - Lottomatica shares slumped on Wednesday after the Italian gaming group agreed an all-share merger with Spain's Cirsa that would create the world's second-largest listed gaming and sports betting operator.

Under the proposed cross-border merger, Cirsa will be absorbed into Lottomatica, with Cirsa shareholders receiving 0.668 newly issued Lottomatica shares for each share held.

Existing Lottomatica shareholders are expected to own around 67.5% of the enlarged group, while Cirsa investors will hold about 32.5%. Blackstone, Cirsa's largest shareholder, is expected to emerge with a roughly 24% stake.

The combined business would have pro-forma adjusted EBITDA of around �2bn and hold leading positions across Italy and Spain, as well as other international markets, the company said in a statement.

Lottomatica said the deal should generate around �115m of annual pre-tax cash synergies from operating and interest-cost savings by the third full year following completion.

The enlarged company is targeting up to �4bn of capital returns over the three years after completion, including a planned �744m post-closing return through a special dividend, tender offer or combination of the two. Cirsa will also pay shareholders a �262m extraordinary dividend before the merger takes effect.

Lottomatica's chairman and chief executive Guglielmo Angelozzi said: "With the combination of Lottomatica and CIRSA, two extremely successful companies, we create the undisputed leader in Italy and Spain."

He said the merger would create more avenues of growth opportunities, particularly online.

The transaction remains subject to shareholder and regulatory approvals, with completion expected in the second quarter of 2027.

At 1358 BST, Lottomatica shares were down 9.8% at �22.35 in Milan.