FTC OKs Harrah's Acquisition of Caesars

Harrah's Entertainment Inc. (HET) is one step closer to regaining its title as the world's largest gambling company. The Federal Trade Commission said Harrah's could move forward with its $5.2 billion acquisition of Caesars Entertainment Inc (CZR).

An FTC (search) spokesman had no comment but the Las Vegas-based companies said in a joint news release Wednesday that the federal agency had closed its investigation into the proposed deal.

Nevada gambling regulators still must sign off on the merger before Harrah's takes control of its rival.

Nevada officials are expected to decide Friday and Harrah's is set to complete the transaction on Monday. Gambling regulators in New Jersey, Louisiana, Mississippi and Indiana already have approved the deal.

The approval process has taken more than a year. In July, Harrah's agreed to buy Caesars for $1.8 billion in cash and to exchange about $3.4 billion in Harrah's stock for all shares of Caesars. Harrah's also will assume about $4.2 billion in Caesars debt.

Once the merger is completed, Harrah's will own and manage more than 40 properties, including riverboats and hotel-casinos in 12 states and three countries. The combined companies will have revenues of about $8.75 billion — nearly $2 billion more than MGM Mirage Inc., currently the world's largest gambling concern.

The merger allows Harrah's to increase its exposure along the booming Las Vegas Strip by acquiring Bally's, Flamingo, Paris and the revamped Caesars Palace. The resorts give Harrah's customers enrolled in its highly successful Total Rewards program more access to one of the top tourist destinations in the country.

Harrah's operates the Rio and Harrah's in Las Vegas, compared with MGM Mirage's (MGG) 11 Strip properties.

Once the merger is cemented, Harrah's will control nearly 17,600 rooms in Las Vegas after the new hotel tower at Caesars Palace opens this summer. MGM Mirage has about 37,500 rooms, all of them on the Strip.

MGM Mirage completed its merger with Mandalay Resort Group in April.