MILAN, Dec 7 (Reuters) - U.S.-listed gaming group IGT said on Monday it had agreed to sell its Italian gaming machine, sports betting and digital gaming businesses to Apollo's Gamenet Group for 950 million euros ($1.2 billion) in cash.

The deal values the two businesses - Lottomatica Videolot Rete and Lottomatica Scommesse - at around 1.1 billion euros including debt, IGT said, adding the sale of the units would happen at "an attractive multiple".

Net proceeds from the sale, which is expected to close in the first half of next year, will be used primarily to reduce debt, IGT said.

"The rebalancing of our business and geographic mix reframes and simplifies our priorities while improving the company's future profit margin, cash flow generation, and debt profile," IGT Chief Executive Marco Sala said in a statement.

IGT's Italian business was delisted from the Milan bourse in 2015 following the acquisition of its U.S. subsidiary. IGT will retain some gaming activities in Italy, including the popular lotto game.

Credit Suisse acted as financial adviser for IGT on the deal, UBS as financial and fairness opinion adviser while White & Case and NCTM advised on legal issues.

Mediobanca, Barclays and law firms Paul, Weiss, Rifkind, Wharton & Garrison, Cleary, Gottlieb, Steen & Hamilton and Latham & Watkins advised the buyer.

($1 = 0.8260 euros)

(Reporting by Francesca Landini. Editing by Jane Merriman)