Vici Properties Acquires MGM Growth in $17.2 Billion Deal

Vici Properties and MGM Resorts announced an agreement Wednesday that will allow Vici to acquire MGM Growth Properties (MGP) in a deal valued at $17.2 billion.

With the deal, Vici will have a majority of the MGM operating units held by MGM Resorts, paying $43 per unit, or approximately $4.4 billion in cash, and acquiring 100% of the outstanding class A shares of MGP in a stock-for-stock transaction, a news release said.

"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," Bill Hornbuckle, chief executive officer and president of MGM Resorts, said in a media release. "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."

A real estate investment trust (REIT) that focuses on casino properties, Vici properties is based in New York City. Vici leases its properties to operators that include Caesars Entertainment, Century Casinos, Hard Rock International, JACK Entertainment and Penn National Gaming, according to Vici’s website.

For more information about MGM Resort Casinos and other U.S. gaming facilities, check out this guide to top US Casinos.

BetMGM Keys Growth

MGM Resorts formed MGM Growth Properties in 2016 and has executed multiple transactions for MGM Resorts to strengthen its balance sheet, return capital to shareholders and fund investments in growth opportunities. BetMGM Casino and Sportsbook was the result of these investments.

Now, BetMGM is one of the top iGaming and sports betting operators in the country. MGM Resorts expects to have $11.6 billion of domestic operations liquidity available for future projects with the aim of returning value to shareholders and solidifying its balance sheet.

"The partnership with MGP over the past 5 years has provided significant value to MGM Resorts as well as MGP's other shareholders," Paul Salem, chairman of the MGP board, said in the news release. "We are thankful to the MGP management team for all of their efforts to develop MGP into a premier gaming REIT, which is evidenced by the 15.9% premium offered by Vici in this transaction, representing a 149% increase to MGP's valuation since IPO. We look forward to our new long-term partnership with the great team at Vici."

More Details of the Deal

As part of the transaction, the master lease will be amended and restated; it will be for 25 years to start with three 10-year renewals, for an initial annual rent of $860 million including the pending MGM Springfield deal in Massachusetts, the release said.

MGM Resorts will also own 1% stake in the Vici operating partnership, worth about $370 million. The transaction is expected to close in the first half of 2022, subject to regulatory approvals as well as Vici stockholders approving the deal.

"We have always admired the exceptional quality of MGP's real estate portfolio and are thrilled this transaction allows MGM to reach its stated objectives while enhancing value for both Vici and MGP shareholders,” Ed Pitoniak, chief executive officer of Vici Properties, said in the release.