Eldorado Resorts buys Caesars in Historic $17.3 Billion Deal
In what is sure to someday be considered a historic merger between two longstanding rivals, Eldorado Resorts is buying Caesars Entertainment in a $17.3 billion cash-and-stock deal that the company says will create the largest gambling company in the U.S.
The new company will retain the Caesars name but will be lead by Eldorado executives, such CEO Tom Reeg and others, and headquartered in Reno, Nev., the current corporate home of Eldorado Resorts. The merger will put a total of 60 casinos and resorts in 16 states under one company.
“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,” said Reeg via press release. “The combined entity will serve customers in essentially every major U.S. gaming market and will marry best-of-breed practices from both entities to ensure high levels of customer satisfaction and significant shareholder returns.”
Why Caesars is Merging
While Caesars is one of the most recognizable casino and gaming businesses in the world, the company has been in financial trouble over the past decade. Caesars filed for bankruptcy protection in 2015 and after finishing those proceedings two years later, set a new course under new leadership.
Billionaire businessman Carl Icahn emerged as the top shareholder a short time later, and since then has been pushing for fundamental changes to the company, including the installation of CEO Tony Rodio.
Initially reported back in March, the sale of Caesars to Eldorado, which was spearheaded by Rodio under the new direction of the company for which Icahn lobbied for and ultimately prevailed, is seen as a huge win for Caesars and its shareholders.
Meanwhile, Eldorado acquires a huge expansion to its suddenly very large portfolio of assets for which to better combat industry rivals MGM Resorts and Wynn Resorts.
If the U.S. is truly set to become the worldwide leader in sports betting entertainment as some experts have predicted, Eldorado will be better positioned after the merger to compete for a much larger share of the market.
More Merger Details
While Eldorado doesn’t currently have any properties in Las Vegas, the company owns 26 casinos in 12 states, including its flagship location in Reno and the Tropicana in Atlantic City, N.J.
Caesars holds many of the most recognizable properties in Las Vegas including Caesars Palace and the Flamingo. It also owns Harrah's resorts and casinos, which has nearly two dozen locations spread throughout the nation.
In order to make the acquisition, Eldorado parts with $7.2 billion in cash and around $77 million in stock shares. It will also absorb Caesars' outstanding debt which totals almost $9 billion.
Eldorado is set to acquire all outstanding shares of Caesars for $12.75 per share, consisting of $8.40 per share in cash consideration and 0.0899 shares in Eldorado common stock.
Upon governmental oversight approval of the merger and assumed close of the deal later this year, El Dorado shareholders will make up about 51 percent of the newly combined company while Caesars’ shareholders will retain around 49 percent.
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