Lottomatica to Acquire Spain's Cirsa; Blackstone to Become Top Shareholder

Italian gaming company Lottomatica (MI:LTMC) announced on Wednesday it will acquire Spanish rival Cirsa (BME:CIRSA), creating what the firms described as the world's second-largest listed gaming and sports betting operator. The transaction will establish U.S. private equity firm Blackstone (NYSE:BX), Cirsa's main shareholder, as the largest single stakeholder in the newly merged entity.

Deal Structure and Ownership

Under the terms of the agreement, Cirsa shareholders will receive 0.668 new Lottomatica shares for each Cirsa share they hold. Following the merger, which will see Cirsa absorbed by Lottomatica, existing Lottomatica shareholders are expected to own approximately 67.5% of the combined company.

Blackstone's stake in the new firm will be approximately 24%, making it the top individual shareholder. The companies also noted that Cirsa will pay an extraordinary dividend of €262 million, equivalent to €1.56 per share, to its shareholders before the merger takes effect.

Financial Outlook and Synergies

The combination is projected to generate €115 million in pre-tax cash synergies, which are expected to be fully realized by the third year after the deal's completion. The new entity, which will retain the Lottomatica name, will be listed on both the Euronext Milan and Spanish stock exchanges.

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For investors, the merged company has outlined a significant capital return plan. It aims to distribute up to €4 billion to shareholders through dividends and share buybacks over the three years following the close of the transaction.

Leadership and Operations

Guglielmo Angelozzi, the current Chairman and CEO of Lottomatica, will continue to lead the combined company in the same capacity. The board will consist of Lottomatica’s current 11 directors, supplemented by two new directors nominated by Blackstone.

The company's headquarters will be in Rome. A secondary headquarters for Cirsa's ongoing operations will be maintained in Barcelona.