Lottomatica and Cirsa Merge to Create Global Gaming Giant

Italian gaming company Lottomatica has announced a cross-border merger by absorbing the Spanish company Cirsa. The transaction aims to create the second largest gambling company in the world, establishing a dominant position in both the Italian and Spanish markets. The combined entity will retain the name Lottomatica, with its headquarters in Rome and a secondary office in the province of Barcelona. The new group will also have a significant presence in Latin American markets including Mexico, Colombia, Peru, and Panama, as well as Portugal, Morocco, the Dominican Republic, Costa Rica, and Paraguay.

The deal is structured as a share swap. Cirsa shareholders will receive 0.668 new Lottomatica shares for each Cirsa share held, which will give them a 32.5 percent stake in the combined company. Additionally, Cirsa shareholders will receive an extraordinary cash dividend of 1.56 euros per share, totaling 262 million euros. The valuation of the offer is approximately 2.8 billion euros, representing a 21 percent premium over Cirsa's closing price of 13.64 euros on Tuesday. Following the announcement, Lottomatica shares dropped nearly 10 percent while Cirsa shares rose 15 percent to 15.74 euros.

Blackstone, which currently holds 74 percent of Cirsa, has committed to remaining in the new group for at least three months, where it will hold a 24 percent stake. The operation is expected to conclude in the second quarter of next year. The combined company expects to reach a potential market of 34 billion euros, with both companies having previously reported annual revenues exceeding 2.2 billion euros each.

Reporting on the event differed based on political lean. The center-left source focused on the financial mechanics of the merger, the specific share exchange ratios, and the potential exit strategy of the private equity firm Blackstone. In contrast, the center-right source framed the merger as a strategic evolution of Lottomatica into a European champion, emphasizing the growth of the online gaming segment and the company's ability to compete with international colossi.