A new global gambling giant is born. Lottomatica has announced the acquisition of the Spanish Cirsa, a company active in the same sector which has around 15 thousand employees and hundreds of gaming rooms distributed mainly between Spain and Latin America.
The merger
At yesterday’s meeting the respective boards of directors of the two companies reached an agreement on the structure and main terms of a possible merger. The agreement provides for the incorporation into Lottomatica of the Spanish company which “will cease to exist as a distinct legal entity, without giving rise to any liquidation procedure”. Cirsa shareholders will receive newly issued shares of Lottomatica in exchange for the securities held in the Spanish company.
“A leading global operator is born”
Both companies, informs El Pais, recorded a turnover of more than 2.2 billion euros each in their latest annual results and aspire to a combined gross profit of more than 2 billion euros. The potential market for their combined business is around €34 billion. “In addition to Italy and Spain – explains the Spanish newspaper – the new Lottomatica (which will keep this name) will have significant access to Panama, Colombia, Mexico, Peru, Portugal and Morocco, as well as the Dominican Republic, Costa Rica and Paraguay”.
The agreement, as underlined in a note from the companies, “will create a leading global operator in the sports betting and gaming sector, with leadership positions in Italy and Spain and a significant presence in other rapidly growing markets”. The new company aims to be the second publicly listed operator globally in the gaming and sports betting sector.
What happens on the financial front
On the financial and remuneration front, overall growth and distributions to shareholders are estimated in line with Lottomatica’s standalone scenario.
Cirsa shareholders will receive, in exchange for their existing shares, 0.668 new Lottomatica shares for each Cirsa share owned. According to the stated exchange ratio, shares representing 100% of Cirsa’s current share capital would represent approximately 32.5% of Lottomatica’s share capital once the merger is completed.
Furthermore, prior to the exchange, Cirsa shareholders will receive a special dividend of 1.56 euros per share in cash, for a total of 262 million euros. Blackstone, Cirsa’s current largest shareholder with 74%, has committed to remaining in the new group for at least three months, maintaining a 24% stake.