The merge agreement is worth a total $17.3 billion, $7.2 billion in cash.
Eldorado Resorts and Caesars Entertainment entered into a merger agreement this week to create the largest US gaming company. The combined company will offer approximately 60 domestic casino–resorts and gaming facilities across 16 states.
Eldorado will acquire Caesars in a deal worth a total of $17.3 billion, comprised of $7.2 billion in cash, approximately 77 million Eldorado common shares and the assumption of Caesars outstanding net debt. Eldorado and Caesars shareholders will hold approximately 51 percent and 49 percent of the combined company’s outstanding shares, respectively.
Once the transaction is completed, the combined company will retain the Caesars name to capitalize on its brand value in the global gaming industry. The deal comes less than two years after Las Vegas-based Caesars survived Chapter 11 bankruptcy.
Tom Reeg, chief executive officer for Eldorado, commented, “Eldorado’s combination with Caesars will create the largest owner and operator of US gaming assets and is a strategically, financially and operationally compelling opportunity that brings immediate and long-term value to stakeholders of both companies. Together, we will have an extremely powerful suite of iconic gaming and entertainment brands, as well as valuable strategic alliances with industry leaders in sports betting and online gaming. The combined entity will serve customers in essentially every major US gaming market and will marry best-of-breed practices from both entities to ensure high levels of customer satisfaction and significant shareholder returns.”
Jim Hunt, chairman of Caesars, said in a release, “This announcement is the culmination of a thorough evaluation by the Caesars Board of Directors. The Board unanimously concluded that the combination of these two companies creating an even stronger entity is a decision for our shareholders’ consideration and vote for immediate and ongoing value.”
Caesars operates several brands, including Harrah’s, Caesars and Horseshoe, with 34 casinos and resorts containing more than 39,000 hotel rooms. Meanwhile, Eldorado Resorts operates 26 properties in 12 states, including Tropicana in Atlantic City, N.J., and Eldorado in Reno, Nev., with more than 12,000 hotel rooms.
The Caesars transaction is subject to approval of the stockholders of Eldorado and Caesars, the approval of applicable gaming authorities, the expiration of the applicable Hart-Scott-Rodino waiting period and other customary closing conditions, and is expected to be consummated in the first half of 2020.
As part of the deal, Eldorado will work with VICI Properties to exchange various assets. One result will be that Eldorado will sell the real estate associated with Harrah’s Resort Atlantic City, Harrah’s Laughlin Hotel & Casino in Nevada, and Harrah’s New Orleans Hotel & Casino for about $1.8 billion to VICI. The company will lease the properties from VICI for about $154 million a year.
