Posted on: Saturday, June 11, 2005

Caesars, Harrah's merge in $9B deal

By Adam Goldman
Associated Press

LAS VEGAS — Nevada gambling regulators signed off yesterday on the merger between Harrah's Entertainment Inc. and Caesars Entertainment Inc., creating the largest gambling company in the world with nearly 100,000 employees and $9 billion in revenue when the deal closes next week.

Receiving approval from the Nevada Gaming Control Board and Gaming Commission was the last regulatory hurdle the Las Vegas-based companies faced, and they plan to officially conclude the transaction Monday.

Gambling regulators in New Jersey, Louisiana, Mississippi and Indiana already have OK'd the deal, along with the Federal Trade Commission, which gave its blessing Wednesday.

During regulatory hearings, Harrah's officials said the deal was worth $9 billion, making it the largest merger in the industry's history.

Harrah's is paying $1.87 billion in cash and $3.27 billion in stock for Caesars. Harrah's will assume $3.86 billion in Caesars debt.

The value of the deal is about $400 million less than when the merger was announced in July. Harrah's executives said Caesars has paid off debt by selling assets domestically and abroad, lowering the deal's overall price.

The merger gives Harrah's customers enrolled in its Total Rewards program more options in Las Vegas and boosts its enrollment to 40 million members.

Along with the Rio and Harrah's, the company will add Bally's, Flamingo, Paris and Caesars Palace to its portfolio of 17,600 rooms in the city.