Lottomatica Absorbs Cirsa and Blackstone Becomes Its Largest

A binding merger agreement signed in Rome and Barcelona creates the second-largest listed gaming and sports betting operator in the world, on about €2 billion of pro forma EBITDA. Cirsa is valued at roughly 6x.

Lottomatica Group and Cirsa Enterprises signed a binding merger agreement on 2 September for an all-share combination, structured as an EU cross-border statutory merger in which Cirsa is absorbed and ceases to exist as a separate legal entity
Cirsa shareholders receive 0.668 newly issued Lottomatica shares per Cirsa share, leaving Lottomatica holders with about 67.5% of the combined company and Cirsa holders with about 32.5%
Blackstone, which controls Cirsa through LHMC Midco, is expected to hold approximately 24% and become the largest single shareholder, with two board seats and a three-month lock-up
The combined group claims the second-largest listed gaming and sports betting position globally, with pro forma adjusted EBITDA of about €2 billion, number one positions in Italy and Spain, and a €34 billion combined addressable market
Cirsa's implied pro forma value before synergies corresponds to a 2026E EV/EBITDA multiple of approximately 6x, and effectiveness is expected in the second quarter of 2027

Rome Keeps the Name, Barcelona Keeps a Headquarters

Lottomatica Group S.p.A. and Cirsa Enterprises, S.A. announced on 2 September that their boards have agreed the framework and key terms of an all-share combination, set out in a binding merger agreement signed by Lottomatica, Cirsa and Cirsa's majority shareholder LHMC Midco S.à r.l., which is controlled by funds managed by Blackstone.

The structure is an EU cross-border statutory merger by way of absorption. Cirsa will cease to exist as a separate legal entity without any liquidation process, and Lottomatica continues as the surviving entity. Cirsa shareholders receive newly issued Lottomatica shares at a ratio of 0.668 for each Cirsa share held.

The combined company keeps the Lottomatica name, with its registered office, headquarters and tax domicile in Rome, and a secondary headquarters for Cirsa in Barcelona province. Lottomatica shares stay listed on Euronext Milan and will also be admitted to trading on the Spanish Stock Exchanges.

On the numbers the companies present, the merger creates the second-largest listed gaming and sports betting operator globally, with pro forma adjusted EBITDA of around €2 billion on a last-twelve-months basis to 30 June 2026, including €101 million of operating cost run-rate synergies. They claim number one positions in Italy and Spain, nine leadership positions in aggregate, and a combined addressable market of €34 billion, citing H2 Gambling Capital data from August 2026 covering onshore online and land-based but excluding lottery, across Italy, Spain, Panama, Colombia, Mexico, Peru, Portugal and Morocco.

Total identified synergies are about €115 million of pre-tax cash per year from operating expenditure and interest cost savings, expected by the third full year after completion. Of that, €14 million a year is interest, on the assumption that selected Cirsa debt instruments carrying a higher cost are refinanced at Lottomatica's current cost of debt.

The cash movements around completion are substantial. Cirsa will pay its shareholders an extraordinary dividend of €262 million, or €1.56 per Cirsa share, immediately before the merger takes effect. After effectiveness, Lottomatica's board intends to propose a €744 million capital return through a special dividend, a voluntary partial tender offer for treasury shares, or both. Both are funded from existing cash and committed debt financing, and pro forma net debt to adjusted EBITDA at H1 2027 is expected to reach 2.7x, against a stated steady-state leverage target of 2.0 to 2.5x. The company frames total capital returns of up to €4 billion over the three years following completion.

Governance is settled in Lottomatica's favour. The board will have 13 members: the existing 11 Lottomatica directors plus two nominated by Blackstone. Guglielmo Angelozzi will be chairman and chief executive of the combined company and Laurence Van Lancker chief financial officer and deputy chief executive. Antonio Hostench will serve as chief executive of Cirsa and Antonio Grau as its chief financial officer.

Completion requires shareholder approval on both sides and customary foreign direct investment, antitrust, Foreign Subsidies Regulation and gaming clearances. It is also conditional on Cirsa shareholders exercising statutory exit rights over no more than 5% of Cirsa's paid-up share capital, on the extraordinary dividend being approved, on the listing formalities, on the expiry of the statutory creditor opposition period applicable to Lottomatica, and on an independent expert confirming the adequacy of the exchange ratio. Extraordinary general meetings are expected by the end of 2026, with effectiveness in the second quarter of 2027.

Blackstone Is Not Exiting, It Is Converting

The obvious reading is that a private equity owner has found its way out of Cirsa. The terms say something closer to the opposite. Blackstone rolls its Cirsa position into roughly 24% of a larger listed company, takes two of thirteen board seats, and accepts a lock-up of only three months, which is short by the standards of a sponsor selling down and long enough to matter only for the immediate post-completion window. It receives no cash for its stake, though it does participate in the €262 million extraordinary dividend that Cirsa pays before the merger closes. What this looks like is a sponsor swapping a controlling position in a Spanish company for the largest minority position in a pan-European champion with a Milan and Madrid listing, better liquidity and an explicit €4 billion capital return programme. Whether the eventual exit is better than a straight sale depends entirely on where the combined company trades, and Blackstone has just made itself the shareholder with the most to gain and the most to lose from that answer.

Six Times EBITDA Is the Number the Sector Should Sit With

Cirsa's implied pro forma value before synergies works out at approximately 6x 2026 estimated EV/EBITDA, on 2026 estimated EBITDA post-IFRS 16 of €810 million, the midpoint of guidance of €800 to €820 million. For a business with number one positions in Spain and leadership across several Latin American markets, that is a sober multiple, and it is being paid in paper rather than cash. Read against the Cirsa IPO that took the company public, it says the public market never got to the valuation the sponsor wanted, and that a strategic combination at 6x with €115 million of synergies attached was the better route to it. Every other land-based and omni-channel operator in southern Europe now has a reference point for what its own assets are worth to a consolidator, and it is not a flattering one.

The Foreign Subsidies Regulation Turns Up Again, by Name

Buried in the conditions precedent, between antitrust and gaming clearances, is Foreign Subsidies Regulation clearance. That is the same instrument that this week helped suspend the €750 million Brussels casino concession, where a city's failure to notify the European Commission became a ground of challenge. Its appearance here, as a named condition in the largest European gambling merger of the year, is confirmation that FSR has moved from a theoretical compliance item to a standard gate on any large transaction involving non-EU capital. Blackstone is a US sponsor rolling a controlling stake into an EU-listed champion, which is precisely the fact pattern the regulation was drafted for. The parties have plainly built time for it into a timetable that runs from a September signature to a Q2 2027 effectiveness, and any competitor tempted to treat FSR as a formality should note who is treating it as a condition.

Consolidation Has Reached the Regulated Southern European Core

Italian gambling has spent two years consolidating under licence reform that cut operator numbers sharply and priced concessions at a level only scale players could carry. This transaction is the logical endpoint of that policy at the corporate level: the largest Italian operator absorbing the largest Spanish one, in the two most heavily regulated large markets in continental Europe, and telling investors the result is more resilient rather than merely bigger. The risk in that thesis is concentration. A group whose profit centres are Italy and Spain is a group whose earnings are set by two national treasuries and two regulators, both of which have raised taxes on gambling in living memory and neither of which is finished. Diversification into Latin America and Morocco helps at the margin but does not change where the EBITDA comes from. Management calls the execution risk low, which is fair given that neither company is buying anything it does not understand. The policy risk is the one no synergy target covers.

Two national champions have become one continental one, on paper, at six times earnings. The unresolved question is whether the market agrees that scale in heavily taxed markets is worth more than the sum of two companies operating in them separately.