Biggest Ever Gambling Industry Deal

Harrah’s Entertainment has made an offer to buy Caesars for a total of $9.4 billion in cash, stock and assumption of debt.

The deal values Caesars at $16.96 per share, a premium of about 6 percent based on Wednesday's close. The transaction is expected to close in about a year and Harrah's plans to maintain its investment-grade rating afterward.

The combined entity would have 56 casinos and annual revenue in the $9 billion range. That makes it even bigger than the $7.9 billion merger of MGM Mirage that was announced last month.

"Harrah's has achieved noteworthy success by developing and implementing capabilities across our network of properties that increase customer loyalty and improve operating efficiency," Harrah's Chief Executive Gary Loveman said in a press release.

He continued: "We believe we can enhance Caesars' performance by deploying our capabilities into its operations. We estimate we can realize approximately $80 million of synergies in the first full year of the acquisition, with significantly more expected over time."

The companies have different styles and operating strategies. A more centralized Caesars relies on its Las Vegas mega-resorts and a big presence in Atlantic City while geographically diverse Harrah's is stronger in regional markets and with "frequent gamblers."

The deal likely will receive close scrutiny from federal, state and local regulators, any of which could delay or derail it.

An analysis by the Gaming Industry Observer pointed out a merged company would control more than half the gambling revenue and gross profits of Atlantic City's casinos - and nearly as high a percentage of the resort's hotel rooms and slot machines.

The acquisition would undergo rigorous scrutiny by New Jersey regulators, the trade publication said.

"The combined company would own and operate five of the city's dozen casino hotels and control roughly half of the market by most key measures," the Observer said.