Guglielmo Angelozzi, the CEO of Lottomatica, characterized the company's merger with Cirsa as a "low-risk proposition" during an investor call held on Wednesday. This merger aims to create the second-largest listed global gaming and sports betting operator, boasting a pro forma adjusted EBITDA of approximately €2 billion ($2.3 billion).
Angelozzi, who will lead the newly formed entity, reassured analysts about the merger's benefits. He noted that both Lottomatica and Cirsa have experienced consistent revenue growth in recent years, with Lottomatica achieving a 13% compound annual growth rate (CAGR) in revenues and Cirsa following closely at 11% from the first half of 2024 to the first half of 2026.
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." He emphasized that this deal poses no additional risk while also offering significant synergies and access to new market opportunities.
Antonio Hostench, CEO of Cirsa, echoed this sentiment, describing the merger as a significant opportunity since there is minimal overlap between the two companies. He expressed enthusiasm for joining Lottomatica’s long-term growth strategy, asserting that the merger presents a secure venture for both companies.
The merger will be executed as a cross-border transaction within the European Union, with Lottomatica emerging as the surviving entity. When questioned about past cross-border mergers and acquisitions that have not met original expectations, Angelozzi addressed concerns by explaining that Cirsa is already well-managed. He contrasted this with earlier mergers that often attempted drastic changes to underperforming assets.
"In this case, it’s a completely different situation… There’s no turnaround to be made. It’s already very well managed. It’s number one in its markets," he said.
The merged company will be listed on both the Spanish and Italian stock exchanges, where both companies are market leaders. In the first half of the year, Italy contributed 57% to their combined pro forma adjusted EBITDA, while Spain accounted for 23%. Expectedly, post-merger, around 80% of the group's EBITDA will stem from these two markets.
The merger aims to prioritize online betting and gaming, which represented 48% of the combined pro forma adjusted EBITDA in the first half of the year. Distributed gaming and casinos followed, making up 27% and 25%, respectively. Angelozzi highlighted that Spain and Italy are "among the best globally" for market prospects, particularly noting Spain's fragmented online market, where Cirsa holds about 6%.
"These two markets have been growing and will continue to grow very nicely; Spain even more than Italy," he remarked, shedding light on the opportunities for expansion in both countries.
Angelozzi acknowledged Cirsa's extensive market knowledge and strong retail platform, which can enhance their online operations. When asked about potential regulatory concerns regarding Cirsa’s presence in Italy, he dismissed those worries. He expressed confidence that the merger would not heighten concentration levels in the market, predicting no revenue attrition.
"These are complementary brands and complementary models," he stated, assuring that they are well-equipped to manage a multi-brand operation in Italy.
