During an investor call on Wednesday, Lottomatica's CEO Guglielmo Angelozzi characterized the company’s merger with Cirsa as a "low-risk proposition." He shared the announcement, which indicated that this merger would establish the second-largest publicly traded gaming and sports betting operator globally, with a pro forma adjusted EBITDA of around €2 billion ($2.3 billion).
Angelozzi, who is poised to lead the newly formed entity, assured analysts that the deal reflects a low-risk opportunity thanks to the steady growth patterns exhibited by both Lottomatica and Cirsa in recent years. From H1 2024 to H1 2026, Lottomatica anticipates a CAGR of 13%, while Cirsa aims for an 11% growth rate in their revenues.
He explained, "The combined entity will be able to deliver the same rate of growth and shareholder distributions, but with an enlarged pro forma free float and improved liquidity. You will receive the same consistent growth along with investment returns. There’s no additional risk, plus benefits from new market penetration and online opportunities alongside significant synergies. This is a clear win for us."
Cirsa's CEO Antonio Hostench concurred, highlighting the merger's potential. He stated, "From our perspective, this represents a substantial opportunity since, as Guglielmo mentioned, there is virtually no overlap between our companies. We anticipate creating one of the largest organizations worldwide in the gaming industry, aligning with Lottomatica’s appealing long-term strategy, reducing risks and benefiting our teams."
Lottomatica will undertake an EU cross-border merger, with Lottomatica being the surviving entity. When questioned about past unsuccessful cross-border mergers and why this situation differs, Angelozzi noted that Cirsa is already a well-structured company. He remarked, "In past situations, many mergers involved assets that were underperforming, with promises to overhaul and improve them. This merger is unique because we’re uniting strong entities rather than trying to reform struggling ones. Cirsa is a proven group that has operated efficiently for over a decade, and no fundamental changes are necessary. It ranks number one within its markets."
Upon completion of the merger, the combined entity will list on stock exchanges in Spain and Italy, where both companies are already leaders. Italy is projected to account for 57% of the merged group's pro forma adjusted EBITDA, while Spain contributes 23%, and the Rest of the World adds 20%. Consequently, after the merger, 80% of the EBITDA for the combined company is expected to derive from these two markets.
As suggested in the investor materials, the merged company anticipates that online betting and gaming will become its largest sector, representing 48% of the combined pro forma adjusted EBITDA in H1. Distributed gaming follows at 27%, with casinos at 25%.
Angelozzi underscored the favorable conditions in Spain and Italy, labeling them "among the best globally" for growth. He pointed out the particular potential in Spain, where he estimates Cirsa holds around 6% of the online market, indicating a more diverse and less saturated market compared to Italy. "These markets are on the rise and set to expand further, particularly online, with Spain projected to grow even faster than Italy," he remarked.
He praised Cirsa’s extensive market knowledge and consumer insights. Angelozzi mentioned, "Cirsa has an incredible understanding of the market and consumers, along with a robust retail framework that can enhance our online capabilities."
Cirsa also operates in Italy, prompting questions about potential regulatory issues or revenue losses. Angelozzi responded confidently, stating, "Regarding Italian antitrust concerns, we believe our position is secure. Italy is not at the heart of this merger, and we will maintain market concentrations below 40%. We do not foresee revenue declines; our brands and business models are complementary. We've managed multiple brands effectively in Italy, and this merger will only strengthen that portfolio. ","seo_title":"Lottomatica and Cirsa Merger: A Low-Risk Venture for Growth in Spain and Italy","meta_description":"Lottomatica's CEO Guglielmo Angelozzi assures investors that the merger with Cirsa represents a low-risk opportunity, combining strengths in Spain and Italy for significant growth.
