Lottomatica Group (LTMC) M&A announcement summary

Deal rationale and strategic fit

• The all-share merger creates a global gaming leader with approximately €2 billion adjusted EBITDA, combining #1 positions in Italy and Spain and leadership in other high-growth markets.

• The combination accelerates online growth, leveraging advanced technology, omnichannel capabilities, and digital marketing.

• The deal enhances scale, diversification, liquidity, and shareholder value, with increased free float and dual listings in Spain and Italy.

• Both companies have a track record of profitable growth and experienced management, reducing integration risk.

• The combined entity will be the second-largest listed gaming and sports betting operator globally.

Financial terms and conditions

• The transaction is an all-share merger, with CIRSA shareholders receiving 0.668 new Lottomatica shares per CIRSA share.

• Lottomatica shareholders will own 67.5% and CIRSA shareholders 32.5% of the combined entity; Blackstone will hold 24%.

• CIRSA shareholders receive a €262 million extraordinary dividend pre-merger and €744 million capital return post-merger via tender offer or dividend.

• Board plans to return up to €4 billion to shareholders over three years, including buybacks and post-merger distributions.

• Dividend policy of 30% of adjusted net profit and ongoing buyback program maintained.

Synergies and expected cost savings

• Annual run-rate cost synergies of €115 million to €150 million targeted within three years, mainly from OpEx savings in procurement, technology, and financing.

• Interest cost savings of €14 million per year are anticipated from refinancing higher-cost debt.

• Integration costs estimated at €120 million over three years.

• No CapEx synergies included in current estimates; upside from online growth not factored into synergy targets.

• Additional upside expected from deploying Lottomatica’s tech stack to CIRSA’s online business.