Eldorado Resorts Buys Caesars Entertainment For $17.3 Billion
Eldorado Resorts is buying Caesars Entertainment, both the name and its properties, for $17.3 billion, making it the largest owner and operator of U.S. gaming assets. The deal has Eldorado parting with $7.2 billion in cash and another estimated 77 million in stock shares. Eldorado Resorts will also take over all of Caesars debt. Eldorado shareholders will control 51% of the combined company, and 49% will belong to Caesars shareholders.
While the new casino will continue to use the Caesars name, all of the top leadership will be from Eldorado. The transaction is transformational for each company’s shareholders, customers, and employees as it is combining Caesars regional network and Las Vegas assets with Eldorado’s operating expertise.
Eldorado currently operates 26 gambling properties in the U.S., and with its purchase of Caesars, it will now own an estimated 60 properties in 16 states.
“Together, we will have an extremely powerful suite of iconic gaming and entertainment brands,” stated CEO Tom Reeg of the deal, “as well as valuable strategic alliances with industry leaders in sports betting and online gaming.”
According to Casino.org, the merger comes after “a lengthy courtship and months of speculation.” Caesar’s shareholder Carl Icahn has been urging the casino conglomerate to finalize the purchase for months. And now that an agreement has been reached, Caesars adjourned its 2019 Annual Shareholders Meeting without conducting any business. Instead, a meeting has been scheduled for July 2nd to give shareholders time to learn about the new deal.
The merger is still subject to the approval of both companies’ shareholders as well as trade and gaming regulators. Therefore, it is expected that the deal will not become final until the first half of 2020. However, according to company executives, they have already identified an estimated excess of $500 million in synergy valuation that they plan to achieve within year one.
In summary, Eldorado will acquire all of Caesars outstanding shares for a total value of $12.75 per share, consisting of $8.40 per share in cash consideration and 0.0899 shares of Eldorado common stock. The market closed on Friday, June 21st at just under $10.
After the completion of the transaction, not only will Eldorado hold the title of the largest gaming operator in the U.S., but will be able to monopolize on Caesar’s long-standing iconic global brand name as well as its tradition of leadership within the international gaming industry.
