MGM Resorts to sell land in $17.2B deal

Business

LAS VEGAS, NEVADA – AUGUST 28: An exterior view shows the marquee at MGM Grand Hotel & Casino on the Las Vegas Strip amid the spread of coronavirus (COVID-19) on August 28, 2020 in Las Vegas, Nevada. MGM Resorts International will lay off 18,000 furloughed employees in the United States on Monday as the resort industry struggles to recover from the pandemic. The move was necessary since federal law requires companies to lay off furloughed workers after six months. Before hotel-casinos shut down in March, the company had 68,000 employees nationwide, including 52,000 in Las Vegas. MGM Resorts said laid-off employees could be brought back as business demand returns. (Photo by Ethan Miller/Getty Images)

LAS VEGAS (KLAS) — MGM Resorts International and its real estate properties division, MGM Growth, have entered an agreement with VICI Properties to sell its land for $4.4 billion. Under the deal, VICI will own the land, not the company.

MGM Growth owns properties including a dozen resorts in Las Vegas and other parts of the United States.

The deal values MGM Growth at $17.2B, which includes $5.7B of debt, according to an MGM Resorts news release Wednesday. MGM Resorts will own about 1% stake in VICI’s operating partnership, which is worth around $370 million.

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“In 2016 we started on our journey to become asset light and this announcement, together with our recently announced Springfield and CityCenter transactions, reflects the culmination of those efforts and a major step forward in simplifying our corporate structure,” said Bill Hornbuckle, CEO and president of MGM Resorts. “As a result of these actions, we are well positioned and remain focused on pursuing growth opportunities in our core business, with significant financial flexibility to continue to deploy capital to maximize shareholder value.”

VICI’s portfolio consists of 28 gaming facilities. VICI announced a few months ago it’s partnering with another company to buy the land under the Venetian, Palazzo and Sands Expo for more than $6 billion.

According to the companies, the deal should be finalized in the first half of 2022.

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