Casino operator Eldorado Resorts has officially confirmed that it has agreed to acquire Caesars Entertainment in a $17.3 billion cash-and-stock deal, including debt, that will result in the largest international gambling company in the world, with a portfolio of at least 60 resort complexes in five countries and 16 states.
The Reno-based casino conglomerate will be paying out $8.40 per share in cash, as well as 0.0899 shares of Eldorado stock for every Caesars’ share amounting to a total of $12.75 per share buyout. The merged entity will keep the Caesars name, the companies said in a joint statement, with its stock to be traded on the Nasdaq.
Eldorado Chairman Gary Carano and CEO Tom Reeg and are expected to lead the revamped company, with its headquarters set to remain in Reno. However, with the merger, the multinational casino chain will also have a corporate office in Las Vegas, where Caesars has its origins.
New Caesars Seen To Dominate Major US Gaming Markets
With the merger, Reeg sees Caesars serving clientele in essentially every major gaming market in the US. Caesars boasts around 40 properties in 13 states, including nine on the Las Vegas Strip, where Eldorado is presently absent. On the other hand, Eldorado owns and runs 26 properties in 12 states.
The chief executive sees the combined company’s impressive portfolio of iconic entertainment and gaming brands ushering in more upward growth for what is being touted as potentially the largest gaming company in the world. Reeg sees the merged company accomplishing about $500 million in cost savings in its first year after closing.
Merger Will Be Finalized By 2020
Eldorado and Caesars shareholders will hold about 51 percent and 49 percent, respectively, of the combined company’s outstanding shares. The merger is expected to be finalized in the first half of 2020 as they wait on the approval of gambling regulators in multiple states, as well as the green light from shareholders of both the companies, and the approval of the Federal Trade Commission (FTC).
Reeg said that Eldorado wants to sell some of its properties located in hubs where federal anti-trust issues could rise before the merger closes. Reeg added that the firm is also set to evaluate Caesars’ gambling properties on the Strip, as it mulls cutting down its Las Vegas presence. The casinos set to be assessed are Planet Hollywood, Caesars Palace, Paris Las Vegas, and the Linq, as well as Bally’s Las Vegas and Harrah’s Las Vegas.
Reeg also implied that the merger will cut short Caesars’ plans for overseas expansion, particularly the company’s interest in bidding to build integrated resort complexes in new gambling market Japan.
The combined entertainment firm is slated to run around 71,000 slot machines, 4,000 table games, 300 food and beverage outlets, and 51,000 hotel rooms.
Carl Icahn Gets His Way
The deal comes just three months on the heels of Caesars agreeing to offer billionaire investor Carl Icahn three seats on its board and control in the selection of its next CEO. Carl Icahn stated that he was very happy with the merger decision and is looking forward for the investment to prosper.
Emerging from a two-and-a-half-year bankruptcy reorganization in 2017, Caesars had around $12 billion in debt severed from the firm’s books. The restructuring also created VICI Properties, a real estate investment trust that owns the land and buildings allied to Caesars’ casino properties. Under the arrangement, the real estate is leased back to Caesars Entertainment.
With the merger, VICI is seen acquiring the properties linked to Harrah’s New Orleans, Harrah’s Atlantic City, and Harrah’s Laughlin from Caesars in exchange for $1.8 billion. VICI will then be leasing back the real estate to the Eldorado-Caesars combined company.
The planned merger comes as Eldorado ramps up its acquisition campaign, after actively buying properties for the past two years in a row. Isle of Capri Resorts was acquired by Eldorado in 2017 for $1.7 billion. In 2018, Eldorado acquired seven properties from Tropicana Entertainment via a joint venture with Gaming and Leisure Properties. The company would later go on to pay $327.5 million the Grand Victoria Casino in Elgin, Illinois.
Caesars Chairman Jim Hunt expressed in a statement that the firm’s board has unanimously decided that the merger of the two companies into a stronger entity will be the best step to undertake for the welfare of their stakeholders. The merged firm’s board is set to consist of six representatives from Eldorado and five from Caesars for an 11-member total.

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