During an investor call on Wednesday, Lottomatica CEO Guglielmo Angelozzi characterized the company’s merger with Cirsa as a "low-risk proposition." This merger will result in the formation of the second-largest listed global gaming and sports betting operator, boasting a pro forma adjusted EBITDA of around €2 billion ($2.3 billion).
Angelozzi, who will govern the unified entity, conveyed to analysts that the deal is deemed low risk due to the consistent growth trajectories of both companies in recent years. From the first half of 2024 to the first half of 2026, Lottomatica and Cirsa have recorded compound annual growth rates (CAGR) of 13% and 11%, respectively.
He stated, "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, along with capital returns. There’s no additional risk, and you gain the advantages of new markets and online opportunities in addition to significant synergies. That's why this makes a lot of sense to us."
Cirsa's CEO, Antonio Hostench, shared Angelozzi’s optimistic perspective, highlighting the lack of overlap between the two companies. He remarked, "On our side, we see this as a great opportunity because there is almost no overlap. We believe we will create one of the biggest groups in the world in gaming terms. We will align with Lottomatica’s long-term plan, which is very attractive. The risk is minor, and we feel well protected by joining this plan, which will benefit our people."
The absorption of Cirsa will proceed through a cross-border merger within the EU, with Lottomatica acting as the surviving entity. When asked about past cross-border mergers and acquisitions that did not meet expectations, Angelozzi emphasized that Cirsa is already well-managed, noting that previous failures often stemmed from attempts to transform second-tier assets drastically.
"In many cases, prior M&A involved assets that weren't top-tier, and the promise was to completely alter their nature and competitive positioning," he explained. "In this instance, we have a strong group that has been performing well for a decade, so there’s no turnaround needed. Cirsa is already a leader in its markets."
The merged company will be publicly listed in both Spain and Italy, where Cirsa and Lottomatica already dominate the market. Italy contributed to 57% of the pro forma adjusted EBITDA in the first half of the year, while Spain accounted for 23%, with the remainder coming from international markets. Following the merger's completion, it is anticipated that 80% of the EBITDA will stem from Italy and Spain.
Per the merger's investor presentation, online betting and gaming is expected to emerge as the largest segment for the combined group, generating 48% of the pro forma adjusted EBITDA in the first half of the year. Distributed gaming follows at 27%, and casino gaming makes up 25%.
Highlighting the favorable outlook, Angelozzi described the Spanish and Italian markets as “among the best globally.” He noted potential in Spain, where Cirsa is estimated to capture 6% of the online market, indicating it remains more fragmented and underdeveloped compared to Italy. "These two markets have been growing and will continue to exhibit strong growth, especially Spain over Italy," he remarked.
Addressing concerns about potential regulatory issues due to Cirsa’s presence in Italy, Angelozzi expressed confidence, stating, "In terms of Italian antitrust regulations, we don’t perceive it as a risk because Italy is not the core of this deal, which won’t increase market concentration significantly. We expect no revenue attrition. These brands are complementary in nature, and we have experience managing a multi-brand portfolio in Italy. Several existing brands in our business are also complementary. ",
Kyle Goldsmith has been part of Clarion since December 2023 after transitioning from sports journalism to a senior reporting role focused on Latin America with iGB.
