MGM Resorts Pens Multimillion Dollar LeoVegas Takeover
MGM Resorts International announced last week that it is in the process of acquiring the Swedish-based LeoVegas online sports betting provider.
North American gaming leader, MGM Resorts International, announced last week that it finalised the purchase of the Swedish online sports betting brand, LeoVegas. The deal is estimated at US$604 million and was accepted by 96% of LeoVegas shareholders. The final price was lower than the initial offer due to exchange rate fluctuations.
MGM Resorts is a leading provider of land-based casino entertainment and online gambling via its BetMGM brand. The company operates land-based casinos across several US states while its online sportsbook is available in key regulated markets. This year, the company debuted in New York and Ontario with a bouquet of mobile sports betting and iGaming offerings.
Due to fluctuating rates, the Swedish brand will receive US$604 million for the transaction, which is less than the original US$607 million offered. MGM Resorts will pay US$5.72 per share for the acquisition of LeoVegas.
The completion of the transaction arrives only four months after the first takeover bid from MGM, providing an excellent opportunity to create a scaled global iGaming business. Following the deal’s signing, MGM Resorts will take complete control of the Stockholm-based operator once a final share settlement is concluded.
The purchase will allow MGM Resorts to derive valuable synergies with the addition of LeoVegas’ prominent European catalogue to its already comprehensive portfolio of gaming products. This includes its sportsbook brand, BetMGM. The company noted that it plans to keep LeoVegas’ current management in its positions, with them continuing to operate the company’s international platforms.
By adding LeoVegas to its consolidated balance sheet, MGM plans to offset some of the losses from its BetMGM brand. The deal will also fund the massive promotional and advertising costs of BetMGM, which has debuted across numerous North American iGaming markets over the last few years. The parent company was recently required to cover $35.5 million in losses.