During an investor call on Wednesday, Lottomatica CEO Guglielmo Angelozzi characterized the company's merger with Cirsa as a "low-risk proposition." The merger is set to form the second-largest publicly traded gaming and sports betting operator globally, boasting an expected pro forma adjusted EBITDA of about €2 billion ($2.3 billion).
Angelozzi, who will assume the CEO role of the merged entity, reassured analysts that both Lottomatica and Cirsa have shown consistent revenue growth in recent years. The companies recorded compound annual growth rates (CAGRs) of 13% and 11%, respectively, between the first halves of 2024 and 2026.
He remarked on the synergy this merger would create: "The combined entity will be able to deliver the same rate of growth and the same rate of shareholder distribution, but with a larger pro forma free float and liquidity. So you get the same stable and predictable growth and you get the capital returns. You get no additional risk, and you get the benefits of the new markets and the online opportunities on top of the synergies, which are also pretty significant. So that’s why this makes a lot of sense to us."
Cirsa CEO Antonio Hostench expressed similar optimism, stating, "On our side, we see this as a great opportunity because, as Guglielmo said, there is no overlap between the companies, almost no overlap. So we just see creating one of the biggest groups in the world in gaming terms. And we’ll be sharing the long-term plan that Lottomatica has, which is very attractive. So I mean, the risk is minor, and we feel very well protected, and joining this long-term plan will be a plus to our people."
Lottomatica plans to integrate Cirsa through a European Union cross-border merger, with Lottomatica remaining as the surviving entity. When asked about previous unsuccessful cross-border mergers and what makes this one different, Angelozzi said that Cirsa is already a well-managed company. He pointed out that past failed deals often involved changing the core nature of a less established asset.
He stated, "In this case, it’s a completely different situation. You have a group, not a single company in a single country, a group that has been solid for 10 years and delivering. There’s no turnaround to be made. It’s already very well managed. It’s number one in its markets."
The new entity will trade on stock exchanges in both Spain and Italy, where Lottomatica and Cirsa currently lead the market. In the first half, Italy generated 57% of the combined company's pro forma adjusted EBITDA, while Spain contributed 23%, and the Rest of the World accounted for 20%. It is anticipated that 80% of the merged entity's EBITDA will come from Spain and Italy post-merger.
The investor deck indicated that online betting and gaming would become the largest sector for the combined group, representing 48% of the pro forma adjusted EBITDA from the first half, followed by distributed gaming at 27% and casinos at 25%.
Angelozzi highlighted Spain and Italy as "among the best globally" for growth opportunities. He noted that Cirsa holds a 6% share of the online market in Spain, which he described as fragmented and less mature than the Italian market. "These two markets have been growing and will continue to grow very nicely; Spain even more than Italy," he added.
He emphasized Cirsa’s extensive market knowledge, consumer insights, and retail platform, which can enhance the online gaming aspect. Inquiries regarding potential regulatory issues arose, especially due to Cirsa's presence in Italy, but Angelozzi dismissed concerns. "On the Italian antitrust, we don’t think we are in a risky situation because Italy is not the core of this deal and this doesn’t change the level of concentration in the country and will still be below 40% in each relevant market. So we don’t see that. We do not expect revenue attrition. These are complementary brands and complementary models, and we have a history of managing a multi-brand business in Italy and already have several brands that run in our business and that are complementary.",
