European betting deal looks nicely hedged

Lottomatica SpA

02/09/2026 13:08

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Neil Unmack
LONDON, Sept 2 (Reuters Breakingviews) - In M&A, like gambling, sometimes it pays to be bold. Lottomatica’s LTMC.MI €3 billion acquisition of Spanish rival Cirsa Enterprises CIRSA.MC certainly involves an uncertain punt outside the lucrative and fast-growing Italian market. The group, however, looks well hedged.
The 10% fall in Lottomatica’s stock on Wednesday suggests investors weren’t expecting such a big deal. The group run by Guglielmo Angelozzi only listed in 2023 and has grown EBITDA by some 36% over the past two years, thanks to a leading position in Italy, and a profitable shift to online betting. 
Buying Cirsa blurs Lottomatica’s message a little. The Italian business will only make up some 57% of the combined group’s EBITDA, using the first six months of the year’s figures, with Spain now accounting for 23%, along with another 10 countries including Paraguay and Portugal. And Cirsa brings with it some baggage: roughly half its EBITDA is derived from casinos, with just 13% from online sales. Given the all-share deal structure, Cirsa’s top shareholder Blackstone BX.N will now end up with a 24% holding, and two board seats. Meanwhile, gambling M&A has not always panned out very well: think 888’s ill-fated acquisition of William Hill's European business in 2021. 
Still, the numbers look pretty good. The 18 euro per share price, factoring in a special dividend, equates to a premium of about €750 million. The cost savings of €115 million are worth over €800 million in today’s money, after deducting tax and applying a multiple of 10. True, Lottomatica will share that with Cirsa’s shareholders, who will keep nearly a third of the group. Yet there’s scope to cut more costs by centralising technology, and boosting profitability as more sales move online. Moreover, the price looks cheap next to analysts’ nearly 20 euro per share estimate for Cirsa’s value, according to LSEG data. 
There are good reasons to bulk up. Spain is a healthier economy than Italy, leaving punters with faster growth in disposable income. The Italian market may also become increasingly competitive, given Flutter Entertainment’s FLUT.N recent acquisition of Snaitech. And, as prediction markets continue to compete with traditional gambling, scale and the ability to invest in new technology may become ever more important. When the game becomes increasingly tricky, it makes sense to spread your bets. 
     
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CONTEXT NEWS
Lottomatica on September 2 agreed to buy Spanish gambling group Cirsa for €3 billion.
Under the terms of the transaction, Lottomatica will offer 0.668 of its own shares, and a €262 million special dividend. That values Cirsa at 16.5 euros a share, or 18 euros including the dividend.
Shares in Lottomatica were down 10% at 22.22 euros each, as of 10:15 GMT on September 2. 

(Editing by Aimee Donnellan; Production by Streisand Neto)
((For previous columns by the author, Reuters customers can click on UNMACK/neil.unmack@thomsonreuters.com))