Eldorado Resorts has reached a $17.3 billion merger agreement with Caesars Entertainment, in a deal which will create the largest US IR operator.
Caesars had been encouraged to agree to the sale by its largest shareholder, activist investor Carl Icahn. The consummation of this deal ends a long period of uncertainty that had been hanging over Caesars since former President and CEO Mark Frissora announced his plans to resign last November.
Under the deal, Eldorado’s management team will take control of the new company, but it will continue to operate under the Caesars name. Eldorado and Caesars shareholders will hold approximately 51 percent and 49 percent, respectively, of the combined company’s shares.
The combined company will own and operate about sixty US casino resorts and gaming facilities across sixteen states.
Caesars is developing a resort in South Korea near Incheon international airport in Seoul and is competing for a license in Japan.
Tom Reeg, chief executive officer of Eldorado, commented, “Eldorado’s combination with Caesars will create the largest owner and operator of US gaming assets and is a strategically, financially and operationally compelling opportunity that brings immediate and long-term value to stakeholders of both companies. 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.”
Jim Hunt, chairman of Caesars, added, “This announcement is the culmination of a thorough evaluation by the Caesars board of directors. The board unanimously concluded that the combination of these two companies creating an even stronger entity is a decision for our shareholders’ consideration and vote for immediate and ongoing value.”
The combined company’s board of directors will consist of eleven members, six of whom will come from Eldorado and five of whom will come from Caesars.
The deal is subject to shareholder and regulatory approval and if successful is likely to be completed in the first half of 2020.