The market reaction to the merger between Italy’s Lottomatica Group and Spain-headquartered CIRSA Enterprises has been wholly positive since it was announced at the start of the month.
On 2 September, Lottomatica informed the Borsa Milan of its intention to merge with CIRSA through an all-share transaction.
Analysts believe that Lottomatica has placed Madrid-listed CIRSA’s value at somewhere between €2.8bn-€3bn (£2.3bn-£2.5bn) and the move, expected to become effective in Q2 2027, is set to create “global gambling’s second-largest listed betting and gaming operator” behind Flutter Entertainment.
The combined entity is expected to generate income of more than €4.4bn and pro-forma adjusted EBITDA of around €2bn for the 12 months ending 30 June 2026.
This move did not exactly come out of the blue, as CIRSA has been making clear for some time that M&A was on its mind, but it did cause an initial dip in Lottomatica shares, with investors in that company maybe taken aback slightly.
Lottomatica’s stock ended up dipping from €24.77 to €22.88 – a drop of 7.6% – on the day of the merger announcement.
Analysts remained bullish as Ben Shelley of UBS reiterated his “Buy” position on the firm with a target price of €33 and an upside of over 36% at the time of his analysis on 3 September.
By the time James Wheatcroft of Jeffries and Ed Young of Morgan Stanley had reiterated their “Buy” positions with target prices of €35.50 and €30.50 on 7 September and 23 September respectively, Lottomatica’s shares had undergone a marked turnaround since the initial announcement.
Its stock is trading at €26.95 at the time of writing – up by 6.9% over the last month, 21% in 2026 and by nearly 18% since the notable dip after the news of the merger was revealed.
CIRSA’s image reiterates market confidence
If readers think that shows bullishness from investors, the journey that CIRSA shares have embarked on further that point massively.
CIRSA’s share price is up by 37.7% in the last month and by 41.35% since the merger announcement, trading at €19.28 at the time of writing.
Its stock hit €19.84 earlier this week as the last month has seen the group smash its previous all-time high of €16.44 in September 2025 out of the park.
The business, which is 75% owned by investment giant Blackstone and will control 32.5% of the combined entity, has seen its public image soar since Lottomatica confirmed the deal.
Additionally, CIRSA is set to distribute an extraordinary dividend of approximately €262m, equivalent to €1.56 per share, to its existing shareholders.
SBC Noticias reported that analysts César Sánchez-Grande and Álvaro Arístegui believe that the time may be now for investors to “take profits” as the early rise in CIRSA’s stock has reduced the potential for further increases.
Renta 4 Banco set a target price of €23 on CIRSA and has revised its recommendation from “Overweight” to “Hold” as it becomes slightly more bearish on the business.
The investment firm’s analysis suggests that the transaction has three main avenues for value creation that could reach a combined €3.7bn, and it estimates that around 46% of that value is already reflected in CIRSA’s current share price.
Previous analysis of CIRSA from Young and Wheatcroft showed target prices of €18.40 and €20 – one of those has already been exceeded while the other is being steadily crept up on, though admittedly both analysts’ verdicts here came before the merger announcement.
However, early signs do show major positivity from investors, and leadership at both operators will be expected to deliver “stable and predictable growth”, as Lottomatica’s Chief Executive Officer, Guglielmo Angelozzi, put it.
