Caesars Entertainment Corp. announced an agreement to acquire Caesars Acquisition Co. in an all-stock deal, which would create a gaming company with a combined $3.2 billion in market capitalization. As part of the agreement, shareholders of Caesars Acquisition will receive 0.664 shares of Caesars Entertainment, which based on Friday's closing prices would be worth $8.96 a share, for each Caesars Acquisition stock they own. That's below Friday's closing price of $9.45 for Caesars Acquisition's stock. Caesars Entertainment shareholders will own 62% of the combined company, while the merged company will be controlled by affiliates of private-equity companies Apollo Global Management and TPG Capital. The acquisition will help support the proposed restructuring of Caesars Entertainment subsidiary CEOC. The shares of Caesars Acquisition and Caesars Entertainment are both halted while the merger news is disseminated. They have lost 22% and 37%, respectively, this year through Friday.
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