Lottomatica Goes All-In on Spanish Rival Cirsa

Lottomatica has extended its reach by acquiring Spanish rival Circa, positioning itself as the world's second-largest gaming and sports-betting operator. The all-share deal, valued at approximately €2.8 billion, brings Circa's operations, including casinos, gaming halls, slot machines, sports betting, and online platforms in multiple markets, under Lottomatica's umbrella.

Upon completion, Lottomatica will control about 67.5% of the combined company, while Circa shareholders will hold around 32.5%, with Blackstone, the controlling private equity group, owning about 24% and having the right to appoint two directors to a 13-member board.

The newly formed entity will keep the Lottomatica name, retain its headquarters in Rome, and maintain a secondary presence in Barcelona. The merged company is expected to generate around €2 billion in pro forma adjusted EBITDA and more than €4.4 billion in annual revenue, with €115 million in annual pretax cash synergies. Circa shareholders will receive 0.668 newly issued Lottomatica shares for each Circa share owned, while Lottomatica shareholders will own about 67.5% of the combined entity.

Post-merger, Lottomatica plans to propose a capital return of up to €744 million through a tender offer, extraordinary dividend, or a combination of both within the first three years.

The market response has been mixed. Circa shares surged, reflecting the premium in the offer, while Lottomatica shares fell, as investors grappled with the larger, more international, and land-based business than Lottomatica's previous online-focused model. Blackstone, which controls Circa through LHMC Midco, is expected to become the largest individual shareholder in the enlarged company. The deal is expected to close in the second quarter of 2027, subject to shareholder approvals and regulatory clearances.

While Lottomatica and Circa bring stronger positions in Italy and Spain, plus a bigger footprint in growth markets, the integration poses challenges. Lottomatica will gain digital firepower, helping Circa accelerate its shift to online channels. However, the stock-market reaction suggests a split in expectations: Circa shareholders benefited from an immediate uplift, while Lottomatica shareholders faced dilution and integration risks.

The new company will need to prove the €115 million in annual synergies, the growth potential of Circa's online business within Lottomatica, and the ability to maintain strong cash flow to support its ambitious capital-return plan.