by Michael J. Shapiro | December 19, 2017
Two major regional gaming powers are about to join forces. Penn National Gaming, based in Wyomissing, Pa., will acquire Las Vegas-based Pinnacle Entertainment. According to the terms of the agreement, the acquisition will be a cash-and-stock transaction valued at $2.8 billion.
Pinnacle owns and operates 16 gaming properties and a total of more than 4,800 hotel rooms among facilities in Colorado, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, Ohio, Pennsylvania and Texas. As part of the agreement, and to avoid potential competition issues, Penn will divest four properties to Boyd Gaming for about $575 million: Ameristar properties in St. Charles and Kansas City, Mo., as well as the Belterra Casino Resort in Florence, Ind., and Belterra Park Gaming and Entertainment in Cincinnati. 
Penn's portfolio, which currently include the M Resort, Spa and Casino in Las Vegas as well as Tropicana Las Vegas, will grow to a total of 41 gaming properties in 20 different jurisdictions, and about 8,300 total hotel rooms. The company has identified $100 million in annual overhead cost savings that will be driven by merging the operations of the two entities. 
"By combining our highly complementary portfolios and similar operating philosophies," said Timothy J. Wilmott, CEO of Penn National Gaming, "we will be able to leverage the strengths of both our companies and create an unparalleled experience for our regional gaming customers, while generating significant value for our shareholders and business partners."
The transaction is subject to approvals from shareholders, applicable gaming authorities, a waiting period and other customary closing conditions. Executives expect the deal to close in the second half of 2018.