A recent report from the New York Post has the meetings industry abuzz: Are MGM and Caesars Entertainment negotiating a merger?
No offer is on the table yet, but rumor has it that MGM hired investment bank Morgan Stanley and law firm Weil, Gotshal & Manges to research the possibility. To date, Caesars shares are off 25 percent year to date, and MGM is down 15 percent—influencing Caesars investors to push for an MGM deal, according to the New York Post. They’re especially eager now that Caesars CEO Mark Frissora recently announced his resignation as soon as Feb. 8, 2019, making it the perfect time to merge.
The New York Post reported that MGM is valued at $30 billion, while Caesars is not far behind at $22 billion. Caesars already recently rejected an offer from the Golden Nugget casino chain. And MGM may have a run for its money, as Wynn Resorts, valued at $18 billion, could also be interested in negotiating with Caesars.
Of course, what does this mean for meetings? If MGM and Caesars merge, they would own about half the hotel rooms in Las Vegas and Atlantic City, N.J. That could have a major impact on obviously the gaming industry, but also the meetings world. Just as airlines continue to merge, resulting in increased ticket prices and amenity fees, these resorts could see similar effects. Regulators would determine if the acquisition would give the company too much “economic clout,” especially in New Jersey, reported Press of Atlantic City.
If the merger happens, MGM and Caesars would join a long list of mergers and acquisitions already happening in the industry. Marriott and Starwood finally started making moves since the announcement of their merger in September 2016. And this year alone has seen several acquisitions: Wyndham Worldwide acquired La Quinta Holdings, AccorHotels acquired 21c Museum Hotels and Hyatt Hotels Corporation purchased Two Roads Hospitality.