La apuesta europea de Lottomatica está bien cubierta
Los ahorros de costes anunciados compensan prácticamente la prima que pagará por Cirsa
Lottomatica's European bet is well-covered, according to recent wire material. The acquisition of Spanish company Cirsa Enterprises for €3 billion is a bold move outside Italy's lucrative market. Despite Cirsa's 7.6% drop in shares on Wednesday, Lottomatica's stock rose by 3.8%, indicating investors didn't expect such a large operation.
Headed by Guglielmo Angelozzi, Lottomatica's group hasn't been listed since 2023 and has increased its EBITDA by 36% over the past two years, thanks to its leadership in Italy and a profitable shift towards internet-based betting. The Italian business will contribute around 57% of the combined EBITDA, with Spain now accounting for 23%, and the company present in 10 other countries, including Paraguay and Portugal.
Cirsa brings a substantial asset: about half of its EBITDA comes from casinos, while only 13% of sales are made online. The all-stock deal sees Blackstone, Cirsa's main shareholder, reducing its stake to 24% and sitting on two board seats. Fusions and acquisitions in the gaming sector haven't always been successful, as seen in 888's 2021 purchase of William Hill's European business.
Nevertheless, the figures look promising: the €18 price per share, including an extra dividend, represents a premium of €750 million. Cost savings of €115 million are worth over €800 million in present value, after accounting for taxes and applying a 10 times multiple. Although Lottomatica will have to share these savings with Cirsa's shareholders, who will retain nearly a third of the group, there's room for further cost reductions by centralizing technology and increasing profitability as more sales shift online.
The acquisition price seems cheap compared to analysts' valuation of Cirsa at nearly €20 per share. Expanding size makes sense, as Spain's economy is more prosperous than Italy, allowing players to benefit from faster growth in disposable income. The Italian market could also become more competitive due to Flutter Entertainment's recent acquisition of Snaitech.
As prediction markets continue competing with traditional gaming, the scale and ability to invest in new technologies may become even more important. The authors are Reuters Breakingviews columnists, and their opinions are their own.
Written by urgent.news from El Pais Economia's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
