Earlier this week, MGM Resorts International made an announcement that it finalized its $604-million takeover of LeoVegas after the deal was given the green light by 96% of shareholders.
The final price of the acquisition is a little lower than the original offer of $607 million tabled on May 2nd, because of exchange rate fluctuations. Under the provisions of the deal, MGM Resorts will pay the equivalent of SEK61.00 for each share of the Swedish gambling and online sports betting company. The all-cash transaction has been completed just four months after the initial acquisition offer was made, with the US casino and gambling giant describing the bid at the time as a one-of-a-kind opportunity for the company to establish a scaled global online gaming business.
The shareholder approval given to the acquisition offer means that MGM Resorts will formally take full control of LeoVegas by the middle of the following week after a final share settlement is agreed on. LeoVegas, in its turn, is set to be removed from the listing of the Stockholm Stock Exchange.
Bill Hornbuckle, the CEO and President of MGM Resorts, commented on the completion of the deal, describing it as a major milestone for the US gambling giant on its way to pursuing its strategy of enhancing its online gambling footprint on a global scale. He further shared that the company would work to boost the full potential of its omnichannel strategy and expand its global digital gaming business.
LeoVegas’ Acquisition to Add Profitable Business Arm to MGM Resorts Operations
The acquisition of LeoVegas provides MGM Resorts with the chance to gain valuable synergies with the addition of the Swedish gambling and online sports betting company’s operations to its existing portfolio. In addition, the substantial overseas customer base that LeoVegas has not only offers the chance of creating even more significant synergies in the future but is also in line with the core strategy of MGM Resorts, which is seeking to establish global brand awareness.
After the deal was approved by the majority of shareholders, MGM Resorts has indicated that the upper management of LeoVegas, which will oversee the variety of international platforms of the business, including leovegas.com, royalpanda.com, betuk.com, 21.co.uk, pinkcasino.co.uk, and slotboss.co.uk, will be kept intact.
The CEO of LeoVegas Group, Gustaf Hagman, has also supported the takeover deal as he believes that the company is a good fit for the portfolio of MGM Resorts. According to him, being acquired by the US gambling giant was a major win for the Swedish gambling and online sports betting operator.
Apart from the addition of the continental assets of LeoVegas, MGM Resorts was looking for the addition of a business that usually turns in a profit. In a previous statement, the US gambling and casino giant highlighted that the revenues of LeoVegas in the period from 2017 to 2021 compounded a 16% annual growth rate while maintaining strong profitability. Now, according to the company, the takeover deal will allow the combined business assets to set foot in some already existing gaming segments, which would help them enter new areas.
Experts believe that the addition of LeoVegas’ successful results to the MGM Resorts’ consolidated balance sheet will provide the US gambling operator with the chance to offset some of the negative impacts that its loss-making sports betting subsidiary BetMGM has been having on its business. All of this has made LeoVegas an attractive takeover target for the company, which will still have to finance the hefty promotional and advertising costs of the further expansion of BetMGM into more US markets that have legalized sports betting services in the last couple of years.
