Lottomatica and CIRSA approve merger plan and set shareholder votes for November

Lottomatica Group S.p.A. and CIRSA Enterprises, S.A. approved on 8 October the joint merger plan that records the terms announced on 2 September: 0.668 new Lottomatica shares for each CIRSA share, a CIRSA special dividend of €1.56 per share — approximately €262 million — prior to closing, and a €744 million capital return by Lottomatica after the merger. Shareholder meetings will be held on 23 November for Lottomatica and 25 November for CIRSA; LHMC Midco, controlled by Blackstone and holder of 74.232% of CIRSA, has irrevocably committed to vote in favour.

Key economic terms of the Lottomatica CIRSA merger plan

Lottomatica’s directors’ report applies the exchange ratio to 167,992,667 CIRSA shares, implying the issuance of up to 112,219,102 new Lottomatica shares under the 0.668 ratio. After the transaction, existing Lottomatica shareholders would hold about 67.3% of the combined group and CIRSA shareholders 32.7%; in September those stakes were estimated at 67.5% and 32.5% respectively, a change consistent with Lottomatica’s ongoing share buyback.

LHMC Midco would receive 83,301,935 shares and would control roughly 24.3% of the combined group’s voting rights; those shares will be subject to a three-month lock-up and LHMC will appoint two of the thirteen directors.

In addition to CIRSA’s special dividend of €1.56 per share (about €262 million), both companies expect to pay ordinary 2026 dividends of up to €130 million from Lottomatica and up to €100 million from CIRSA before 30 June 2027; if not paid before the merger becomes effective, CIRSA’s special dividend will increase and Lottomatica will pay the balance afterwards. The announced payouts and the buyback will not change the exchange ratio, according to the directors’ report.

Reactions to the Lottomatica CIRSA merger plan

Independent expert BDO Auditores, appointed by the Mercantile Registry of Barcelona, confirmed the fairness of the exchange ratio and the adequacy of the cash exit price on 8 October. Fairness and suitability opinions were also provided by Evercore and PJT Partners to Lottomatica, and by Lazard to CIRSA shareholders other than LHMC.

The accepted ratio falls within Lottomatica’s calculated range (0.518–0.865) and near the upper end of CIRSA’s range (0.30–0.68), allowing both boards to state they defended shareholders’ interests. CIRSA’s share movement, around the level implied by the ratio, suggests the market expects the transaction to close on these terms.

Regulatory conditions governing the Lottomatica CIRSA merger

The merger is cross-border and the deed of merger cannot be signed until a number of conditions are satisfied or waived: competition approvals, foreign investment clearances (including Italy’s golden power regime), authorisation under the EU Foreign Subsidies Regulation, gaming licences where required, approval by both shareholder meetings, approval of CIRSA’s dividend, shareholder exits not exceeding 5%, the end of the opposition period of Lottomatica’s creditors and admission of Lottomatica shares to trading in Madrid, Barcelona, Bilbao and Valencia.

The companies have already filed notifications with the Autorità Garante della Concorrenza e del Mercato (AGCM) in Italy, the Comisión Nacional de los Mercados y la Competencia (CNMC) in Spain, the National Antimonopoly Commission in Mexico, the Conseil de la Concurrence in Morocco, Italian and Spanish investment-control authorities and the European Commission. The plan foresees a long timeline that expires on 10 December 2027, unless extended by the parties; nevertheless, the companies maintain an expectation to complete the transaction in the second quarter of 2027.

You can review the regulatory context in our coverage on [regulation](/regulation).

Exit mechanism, cash price and the 5% condition

Spanish law sets the cash exit price as the average of CIRSA’s closing prices in the three months to 1 September, which gives €13.20 per share, net of dividends received by the exiting shareholder. Applying the exchange arithmetic and the €1.56 dividend, 0.668 Lottomatica shares plus that dividend amount to approximately €17.87 per CIRSA share at the quoted levels.

CIRSA closed at €13.64 on 1 September and at €17.70 on 8 October; Lottomatica moved from €24.77 to €24.41 in that period. With LHMC committed and a free float of 43,289,172 shares (about 25.8% of capital), less than one-fifth of the free float would have to exercise the exit to exceed the 5% threshold and derail the deal, so the condition appears difficult to trigger at current prices.

Financial synergies, leverage and risks

The companies project €115 million of annual pre-tax synergies in the third full year after closing, broken down into €101 million of operating cost savings and €14 million of financial synergies. Lottomatica also estimates an increase in adjusted online EBITDA in a range of €200–300 million from a three‑year growth push; the directors caution that both figures are forecasts and may vary significantly.

At closing, expected leverage at effectiveness is 2.7x, versus a target of 2.0x–2.5x.

Shareholder meetings, timeline and next steps

Lottomatica has convened its meeting for 23 November at midday, which will be held exclusively by telecommunications and opens a period until 18 November for observations from shareholders, creditors and employee representatives. CIRSA will hold its extraordinary meeting in Terrassa on 25 November with a second call on 26 November; LHMC and some CIRSA executives have signed irrevocable voting commitments in favour.

If administrative approvals are obtained on the expected timetable, the companies expect to close in the second quarter of 2027; if not, the plan has a hard deadline of 10 December 2027.

More operational details and sector transaction analysis are available in our [b2b](/b2b) section.