Lottomatica and CIRSA Approve Merger Plan and Set Shareholder Votes for 23 and 25 November

The boards have signed the common merger plan that fixes the terms first announced in September: 0.668 Lottomatica shares per CIRSA share, a €262m CIRSA dividend before completion and a €744m capital return after it. With Blackstone committed, the votes are close to a formality. The regulators are not.

• The boards of Lottomatica Group and CIRSA Enterprises approved the common merger plan on 8 October, confirming the terms announced on 2 September: 0.668 new Lottomatica shares per CIRSA share
• CIRSA will pay an extraordinary dividend of €1.56 a share, about €262 million, before completion, and Lottomatica intends to propose a €744 million capital return afterwards by special dividend, partial tender offer for its own shares, or both
• Lottomatica's shareholders vote on 23 November and CIRSA's on 25 November, where Blackstone's LHMC Midco, with 74.232% of CIRSA, is irrevocably committed to vote in favour
• CIRSA shareholders who vote against can exit for €13.20 a share in cash, about 25% below CIRSA's closing price on 8 October, and the deal falls away if exits exceed 5% of CIRSA's shares
• Antitrust, foreign investment and Foreign Subsidies Regulation filings are in, and completion is still expected in the second quarter of 2027

The September Terms Are Now in a Signed Merger Plan

The boards of Lottomatica Group S.p.A. and CIRSA Enterprises, S.A. approved the common draft terms of the cross-border merger on 8 October, according to a joint press release that CIRSA also filed with Spain's securities regulator, the CNMV. CIRSA will be absorbed into Lottomatica and cease to exist without a liquidation process. BDO Auditores, appointed as independent expert by the Barcelona Commercial Registry, confirmed the same day the fairness of the exchange ratio and the adequacy of the cash exit price, itself one of the deal's conditions.

Applied to CIRSA's 167,992,667 shares, the 0.668 ratio means up to 112,219,102 new Lottomatica shares, according to Lottomatica's directors' report on the merger. It puts Lottomatica's existing shareholders at about 67.3% of the combined company and CIRSA's at 32.7%, against 67.5% and 32.5% in September, a shift consistent with Lottomatica's continuing buyback. LHMC Midco, controlled by Blackstone funds, would receive 83,301,935 shares, about 24.3% of the voting rights, under a three-month lock-up, and designate two of 13 directors. Blackstone stays in here while it sells ICE owner Clarion Events to Informa.

Besides the €262 million CIRSA dividend, both companies expect to pay 2026 dividends by 30 June 2027 of up to €130 million at Lottomatica and up to €100 million at CIRSA, according to the release; if they are not paid before the merger takes effect, the CIRSA special dividend rises and Lottomatica pays the balance later. Neither the dividends nor the buyback will change the exchange ratio, the directors' report says.

Two Meetings, Four Antitrust Filings and a December 2027 Long-Stop

Lottomatica has convened its meeting for 23 November at noon, held only by telecommunication, according to its notice, which gives shareholders, creditors and employee representatives until 18 November to submit observations. CIRSA has called an extraordinary meeting in Terrassa for 25 November, with a second call on 26 November, according to its CNMV filing. LHMC and some CIRSA managers have irrevocably committed to vote in favour, the plan states.

The merger deed cannot be signed until the conditions are met or waived: antitrust clearances, foreign direct investment approvals (in Italy, the golden power regime), EU Foreign Subsidies Regulation clearance, gaming approvals where required, both votes, approval of the CIRSA dividend, exits of no more than 5%, the end of the opposition period for Lottomatica's creditors, and admission of Lottomatica's shares to trading in Madrid, Barcelona, Bilbao and Valencia. The companies say they have filed with Italy's AGCM, Spain's CNMC, Mexico's National Antimonopoly Commission, Morocco's Competition Council, the Italian and Spanish investment authorities and the European Commission. The plan lapses if the conditions are not met by 10 December 2027, unless the parties agree an extension.

The financial case remains a forecast. The companies project about €115 million a year of pre-tax cash synergies by the third full year after completion, €101 million from operating costs and €14 million from financing, and Lottomatica estimates €200 million to €300 million of incremental online adjusted EBITDA on a run-rate basis by the third year; the directors' report warns both could differ significantly. The companies expect leverage of 2.7x at completion, against a target of 2.0x to 2.5x.

The €13.20 Exit Price Makes the 5% Condition Almost Academic

Spanish law sets the exit price at CIRSA's average closing price over the three months to 1 September, which gives €13.20, less any dividends a leaving shareholder receives first. CIRSA closed at €13.64 on 1 September and €17.70 on 8 October, up about 30%, according to Yahoo Finance data, while Lottomatica slipped from €24.77 to €24.41. On those closes, 0.668 Lottomatica shares plus the €1.56 dividend are worth about €17.87 per CIRSA share on our arithmetic, so a holder who exits gives up roughly a quarter of the value. With LHMC committed and only 43,289,172 shares, about 25.8% of CIRSA, in free float, about a fifth of the free float would have to choose the worse price to breach 5%. The condition protects Lottomatica's cash, and on these prices it is unlikely to bite.

The Ratio Sits Near the Top of CIRSA's Own Range

According to BDO's report, Lottomatica's board, using discounted cash flow, arrived at a range of 0.518 to 0.865 Lottomatica shares per CIRSA share; CIRSA's board, across its methods, at 0.30 to 0.68. The agreed ratio sits in the lower half of Lottomatica's range and near the top of CIRSA's, so each board can tell its shareholders it did well, and fairness opinions from Evercore and PJT Partners for Lottomatica, and from Lazard for CIRSA's shareholders other than LHMC, back it. The share price is the more telling evidence: CIRSA trades almost exactly where the ratio puts it, which suggests investors expect the deal to close on these terms.

The Regulators, Not the Shareholders, Now Set the Clock

With the votes effectively assured, the timetable belongs to four competition authorities, two investment-screening regimes, Brussels and the gaming regulators. The companies describe the overlap between their businesses as very limited, though CIRSA does hold an Italian online licence, and the long-stop leaves about six months beyond the second-quarter target. For Spanish rivals, including a Codere whose sale is still unresolved, the November votes make the combination more concrete. For Lottomatica, the bigger exposure is still at home, where the retail concession regime is being extended rather than settled.

The shareholder approvals are now a matter of turnout, not persuasion. What remains open is how quickly the authorities in five jurisdictions sign off, and whether CIRSA's share price holds close to the deal value while they do.