Caesars Entertainment has agreed to merge with Eldorado Resorts to create the largest U.S. gaming company, the companies announced Monday.
Eldorado will acquire all outstanding shares of Caesars for $7.2 billion in cash, about 77 million shares of Eldorado common stock and the assumption of Caesars outstanding debt for a total value of about $17.3 billion, according to a joint press release.
Once the transaction is complete, Eldorado shareholders will own 51 percent of the company’s outstanding shares, and Caesars shareholders will own 49 percent.
The merger will combine “Eldorado’s operational expertise with Caesars industry-leading loyalty program, regional network and Las Vegas assets,” it stated.
“Eldorado’s combination with Caesars will create the largest owner and operator of U.S. gaming assets and is a strategically, financially and operationally compelling opportunity that brings immediate and long-term value to stakeholders of both companies,” said Tom Reeg, CEO of Eldorado.
The resulting company will own and/or operate 60 domestic casino-resorts and gaming facilities in 16 states. It will keep the Caesars name “to capitalize on the value of the iconic global brand and its legacy of leadership in the global gaming industry,” the press release stated.
The number of states involved means there may be a long waiting period before the parties can finalize the transaction, according to Brian Ohorilko, administrator of the Iowa Racing and Gaming Commission.
The buyer has to get approval from regulators in every state where they do business, he said. In Iowa, the Division of Criminal Investigation usually conducts an investigation before the commission votes on approval of the deal, Ohorilko said.
“In this particular case, unless there’s some change in the structure of Eldorado, Eldorado has already been vetted here in Iowa, so the vetting process for Iowa will not be as extensive,” he said.
Eldorado owns and operates Isle Casino-Hotel properties in Bettendorf and Waterloo, Ohorilko said. He expects the commission to receive an application from the company in the next few months.
He also expects the FTC and U.S. Department of Justice to look at the proposed merger from an antitrust standpoint, since both parties are large companies.
In another deal that may help the merger get past federal regulators, VICI Properties will acquire real estate at Harrah’s Resort Atlantic City, Harrah’s Laughlin Hotel & Casino and Harrah’s New Orleans Hotel & Casino for about $1.8 billion. The new Caesars will then lease those properties.
The transactions have been unanimously approved by the boards of directors of Eldorado, Caesars and VICI, the press release stated.
The Eldorado-Caesars merger still has to be approved by Eldorado and Caesars stockholders and gaming regulators and is expected to close during the first half of 2020.
The new company’s board of directors will be made up of 11 members, including six from Eldorado’s board and five from Caesars’.
Council Bluffs Mayor Matt Walsh said he does not believe the merger will impact the operation of the Mid-America Center, which is managed by Ceasars Entertainment.
He said management of the MAC allows Ceasars Entertainment to recruit convention business without having floor space at either of the company’s two Council Bluffs casinos devoted to convention venues.
“At this point, I don’t see any impact on the operation of the Mid-America Center, at least in the short term,” Walsh said.
-- Senior Editor Jon Leu contributed to this report.