Eldorado finishes US$17.3B buyout of Caesars Entertainment

This June 23, 2019, file photo shows Caesars Palace in Las Vegas. (L.E. Baskow/Las Vegas Review-Journal via AP)

LAS VEGAS — A Nevada company that started in 1973 with a single hotel-casino in Reno announced Monday it has completed a $17.3 billion buyout of Caesars Entertainment Corp. and will take the iconic company's name going forward as the largest casino owner in the world.

Eldorado Resorts Inc. said the combined company will now own and operate more than 55 casino properties in 16 U.S. states, including eight resorts on the Las Vegas Strip.

"We are pleased to have completed this transformative merger," Tom Reeg, former CEO of Eldorado Resorts and now CEO of Caesars Entertainment Inc. said in a statement.

Reeg promised to welcome the combined company's tens of thousands of employees and to create value for stakeholders using "strategic initiatives that will position the company for continued growth."

The buyout also affects Caesars properties in the United Kingdom, Egypt, Canada, Dubai and a golf course in the Chinese gambling enclave of Macau. The company vaulted over MGM Resorts International as the world's largest casino operation.

Trading under the Caesars stock symbol, CZR, will begin Tuesday, said Anthony Carano, company president and chief operating officer.

"We're excited as a company and a family to lead such an iconic gambling company with 80,000 team members all over the country," Carano said.

The company plans to shed several properties to satisfy antitrust concerns raised before approvals were granted by the Federal Trade Commission and regulators in Indiana and New Jersey. In Nevada, executives have said they may sell at least one Las Vegas Strip property.

Carano acknowledged the combined company now carries $13 billion in debt and has billions in additional obligations to VICI Properties and another real estate investment trust, Gaming and Leisure Properties Inc.

He said that the company was "in a great financial position as Caesars going forward from here" and will reduce debt. Properties outside the U.S. will likely be sold, he said.

The New Jersey Casino Control Commission approved the deal Friday, after the combined company announced plans to sell Bally's Atlantic City. That will leave Caesars Entertainment with three of nine casinos in Atlantic City: Caesars, Harrah's and the Tropicana.

Executives promised federal regulators the company will sell sites in Kansas City, Missouri; South Lake Tahoe, California; and Shreveport, Louisiana. Reeg told Indiana regulators that casinos in Evansville and Elizabeth would likely be sold, with a sale of a casino in Hammond possible.

In Las Vegas, the combined company now owns Caesars Palace, Paris Las Vegas, Planet Hollywood, Harrah's Las Vegas, the Flamingo, Linq Hotel, Cromwell, Bally's, and the Rio off the Strip. It will be one of the largest employers in Nevada.

Billionaire investor Carl Icahn will be the largest single shareholder, with more than 10% of the combined company and three members on the new company board, Carano said. Icahn acquired a large block of Caesars shares after that company emerged from bankruptcy protection in late 2017. Carano called the financier "integral" to the merger.

Eldorado founder Don Carano and his family developed a winemaking and casino empire that grew into 26 gambling properties and more than 18,000 employees in 12 states before the buyout. Carano died in 2017. Anthony Carano, a grandson, counted nine family members still involved in company affairs.

Caesars Entertainment had some 65,000 employees before casino closures in March due to the coronavirus pandemic, including 30,000 in Nevada. Most of its properties have reopened.

The merger also involves properties in Arizona, Colorado, Florida, Illinois, Iowa, Mississippi, North Carolina, Ohio, Pennsylvania and Maryland.

J.P. Morgan, Credit Suisse and Macquarie Capital served as financial advisers for the deal.