Italy: Lottomatica and Cirsa boards approve common merger plan

The boards of Lottomatica Group and Cirsa Enterprises approved a common merger plan on 8 October for their proposed cross-border combination, moving the transaction towards shareholder votes expected by the end of November.

The plan provides for Cirsa to be absorbed by Lottomatica, which would retain its name and registered office in Rome. Cirsa would cease to exist as a separate legal entity once the merger takes effect.

Under the exchange ratio, each Cirsa ordinary share held at the effective date would be exchanged for 0.668 newly issued Lottomatica shares, with no cash component. 

Cirsa plans an extraordinary pre-merger dividend of €1.56 ($1.74) per share, or about €262m in total.

Independent expert BDO Auditores issued a report on the same day confirming the fairness of the exchange ratio and the adequacy of the cash exit consideration. 

Cirsa shareholders who vote against the plan may exercise a statutory exit right at €13.20 per share, reduced by distributions paid before completion.

The companies have submitted required antitrust filings in Italy, Spain, Mexico and Morocco, foreign direct investment filings in Italy and Spain and a foreign subsidies filing to the European Commission. Submission does not constitute regulatory clearance.

Lottomatica's extraordinary and ordinary shareholders' meeting and Cirsa's extraordinary meeting are expected by the end of November. 

The combination is expected to become effective in the second quarter of 2027, subject to shareholder approval, regulatory clearance and other conditions.

After completion, Guglielmo Angelozzi is set to remain Lottomatica's Chairman and CEO, with Laurence Van Lancker continuing as Deputy CEO and CFO. 

Blackstone, Cirsa's reference shareholder, would nominate two directors to a board expanded from 11 to 13 members. 

The plan also contemplates a €744m capital return after merger completion, subject to corporate and regulatory formalities. Lottomatica's board intends to put the proposal to the merged company's shareholders through a special dividend, partial tender offer or both.

In September, the operators announced the proposed all-share deal. Their earlier outline gave Lottomatica shareholders an expected 67.5% stake in the combined group and Cirsa shareholders 32.5%. The new board approval formalises the terms, with shareholder and regulatory decisions still pending.