MGM Mirage and Mandalay Resort Group completed their merger Monday, closing on a long-awaited deal that creates a combined company with about $7 billion in revenues and 70,000 employees.
The buyout eliminates one of the world's largest gambling companies and establishes another one that controls a majority of the hotel rooms and about 40 percent of the slot machines on the famous Las Vegas Strip.
Ten months in the making, the multibillion dollar merger gives MGM Mirage Inc. ownership of 24 hotel-casinos, including The Mirage, Bellagio, MGM Grand, Treasure Island, Excalibur, Monte Carlo, Luxor and Mandalay Bay in Las Vegas.
Terry Lanni, MGM Mirage chairman and chief executive, said Monday that there were no immediate plans to shed any of the Las Vegas properties and no plans for wholesale layoffs.
"We would hope the vast majority of the people would stay with us," Lanni said.
Several dozen senior executives were expected to leave the new company, and MGM Mirage will appoint new presidents and general managers at the former Mandalay hotel-casinos.
Tourists shouldn't expect to see immediate changes. In the long run, MGM Mirage is likely to enhance some of the former Mandalay properties, Deutsche Bank gambling analyst Marc Falcone said.
"The customers will benefit," Falcone said. "They can look for a lot of improvements and enhancements that will create even better gaming experiences."
Falcone said the merger is unlikely to lead to a price war with MGM Mirage's primary competitors, which include Las Vegas Sands Corp., Wynn Resorts Ltd. and Harrah's Entertainment Inc.
Harrah's is buying Caesars Entertainment for $9.4 billion in cash, stock and debt in a deal that is expected to close during the second quarter.
Once both mergers are completed, Harrah's will remain the largest casino company in the world with about $8.8 billion in revenues.
Las Vegas megaresorts have been driving record earnings for gambling companies, and the majority of MGM Mirage's profits will come from those properties.
MGM Mirage is building a $4.7 billion development on the Strip called Project CityCenter. It will include two, 60-story glass towers, along with a 4,000-room hotel-casino and condos. It is scheduled to open in 2009.
In June, MGM Mirage agreed to purchase Mandalay Resorts for $4.8 billion in cash, $2.5 billion in debt and $600 million convertible debentures. The company secured financing for the merger.
