Online lottery group Zeal Network has announced a takeover offer for Germany’s largest lottery broker, Lotto24.
The transaction will create a digital lottery group with over 5m customers worldwide – with current combined billings of around €500m – and a diverse international footprint.
The combined group will build on the existing Lotto24 business, discontinuing the German secondary lottery business of Tipp24 and transform it to a locally licensed online broker. The companies jointly aim to accelerate growth of online brokerage in the €8.7bn German lottery market.
In an all-share takeover, Zeal expects to offer one new Zeal share for 1.6 Lotto24 shares, in a reflection of the ratio of the volume-weighted average prices of Zeal and Lotto24 shares across the past three months. The deal is expected to deliver cost synergies of €57m per year, strong future cash generation and a reduced risk profile
Dr Helmut Becker, CEO of Zeal, said: "Zeal will reunite with Germany's largest digital lottery broker. We will have a significantly enlarged, loyal customer base, strong technology and marketing platforms, and an exceptionally experienced team. Together with our plans to regain control of Tipp24 and transform its German business models, this puts us in an excellent position to accelerate online growth in both the €8.7bn German lottery market and €270bn global lottery sector – as a locally-licensed broker, licensed operator, and lottery investor.
“This transaction is good for shareholders, good for customers, and good for the German federal states and their lottery beneficiaries. We have held initial, constructive conversations with Lotto24 and look forward to further engaging with the management to achieve a successful combination of the businesses. We also look forward to a successful and constructive cooperation with Germany's state lotteries and invite all shareholders to join us on this journey."
