June 25, 2019 4 min read

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Eldorado Announces Merger/Acquisition Deal with Caesars

  • Caesars and Eldorado merger
  • Eldorado assumes 51% control of the businesses
  • Synergies to reach $500 million after concluding the deal

Eldorado has finished the $17.3 billion acquisition of Caesars in one of the most expansive business consolidating moves.

Eldorado and Caesars Entertainment Merge

Eldorado Resorts and Caesars Entertainment Corporation announced a merger agreement that will reshape the entertainment casino business in the United States significantly with the addition of a new behemoth.

By joining forces, the companies will emerge as a new heavyweight on the national and international landscape. As a result of the merger, Eldorado will be acquiring Caesars’ market shares at $12.75 each, $8.40 which will be paid in cash and the remainder will be distributed in Eldorado common stock at 0.0899.

The tally is quite impressive as Eldorado will be paying $17.3 billion in cash for the acquisition of Caesars, plus 77 million in Eldorado common stock. Eldorado will also have to assume Caesars existent net debt. The companies will be almost equally priced, with Eldorado holding 51% of the shares and control over the company.

Here’s what Eldorado CEO Tom Reeg had to say about the deal:

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.

A new board will be set up, including six executives from Eldorado and five from Caesars. The merger will give the new entity quite a bit of heft on the gaming market, with 60 properties divvied up in 16 states. Eldorado will be assimilated under the Caesars name and the company will remain listed on the Nasdaq Global Select Market.

The deal should bring in estimated synergies of $500 million once the deal has been finalized, with the financial windfall growing exponentially in the years to follow. According to Mr. Reed, the focus will remain mostly on the domestic market and the company will focus on guaranteeing better shareholder returns in the years to follow.

The deal has been made possible by Carl Icahn, who acquired a 10% stake of Caesars’ business in February and has been pressing for sale aggressively since.

Realizing Synergies Between Caesars and Eldorado

The company will be focusing on strengthening its CMS systems and Caesars Rewards loyalty program to encourage more gamers to flock to the properties. Following the deal, the company expects to have 65 million customers, pat of the loyalty program in the United States.

Caesars CEO Tony Rodio also commented on the developments. Mr. Rodio noted that the companies strategy to market Caesars Rewards is a good one as it has already been paying off on the premises of the Centaur casino, where a pilot test has been initiated.

“We believe this combination will build on the accomplishments and best-in-class operating practices of both companies. I’m familiar with Eldorado and its management team, having worked with them on a previous transaction, and I look forward to collaborating with them to bring our companies together.”

Mr. Rodio explained that there hadn’t been a hint of internal strife in reaching the decision and reshuffling the managerial structure of the company. Meanwhile, Jim Hunt from Caesars has expressed the company’s firm conviction that the recent move was approved by everyone involved on the management level. Here’s what Mr. Hunt had to say:

“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.”

Meanwhile, Eldorado has negotiated another property deal with VICI, which has acquired a number of properties under the Harrah’s brand, including Harrah’s Resort Atlantic City, Harrah’s Laughlin Hotel & Casino and Harrah’s New Orleans Hotel & Casino. These properties will be leased to the Caesars-Eldorado business.

Journalist

Rachael is a veteran gaming journalist with over 9 years of writing experience but has only just started within the gambling industry. She has built a keen interest within the iGaming sector over the years from exposure at events and intends to translate her passion into publications here at GamblingNews.com to keep our readers updated with the latest developments.

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