Harrah's closes merger with rival Caesars - Sunday 12th of June 2005

"We are pleased to bring our two great companies together," Gary Loveman, chairman and chief executive of Harrah's, said in a statement. "Today we begin the most important task in the history of our company: Capitalizing on the tremendous potential of this merger."

Harrah's bought Caesars for $1.87 billion in cash and $3.27 billion in stock. Harrah's assumed $3.86 billion in Caesars debt.

Since the Las Vegas-based companies announced the deal last July, they've sold six properties in the United States and interests in South Africa and Nova Scotia casinos. The new company also is selling the Reno Hilton hotel-casino in a deal expected to be completed later this year.

The divestitures knocked about $400 million off the original sale price.

Harrah's was able to finalize the buyout after the Federal Trade Commission and Nevada and Louisiana gambling regulators approved it last week. Officials in New Jersey, Mississippi and Indiana had given their blessings earlier.

Nevada regulators said they didn't think the deal would harm competition in the state, even though Harrah's will increase its number of properties from two to six. The new resorts will more than triple the numbers of rooms controlled by Harrah's in Las Vegas to about 17,600.

Las Vegas is a key market for the company's customers enrolled in its Total Rewards program.

The purchase will nearly double Harrah's revenues to $8.75 billion, propelling it to the top of the hierarchy of gambling companies. MGM Mirage is second, with about $7 billion in revenues.

Harrah's shares rose $1.35, or 1.9 percent, to close at $73.17 on the New York Stock Exchange.

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