Six Flags, Cedar Fair merging in major theme park deal
Why it matters: The companies are seeking to join forces at a time when the theme park industry is still struggling to recover from the economic fallout of the pandemic.
- Combined, they would have 27 amusement parks, 15 water parks and nine resorts in 17 states, Canada and Mexico.
- Their signature properties include Cedar Point in Ohio, Kings Dominion in Virginia and Six Flags Magic Mountain in California.
Details: The companies described the deal as a "merger of equals," giving the new entity an enterprise value of $8 billion.
- Cedar Fair unitholders will get about 51.2% of the new company, while Six Flags shareholders will hold about 48.8%
- They expect the deal to yield $200 million in annual synergies, including $120 million in cost cuts and $80 million in additional earnings.
- Cedar Fair CEO Richard Zimmerman will become CEO, while Six Flags CEO Selim Bassoul will become executive chairman.
- The new board will draw six members from each company, and the new company will be named Six Flags based in Charlotte, North Carolina, while maintaining operations in Cedar Fair's home of Sandusky, Ohio.
The big picture: "The theme-park industry is struggling to rebound from the pandemic, when many parks were closed or operated under restrictions," WSJ reported. "While demand in other hard-hit industries such as cruising has surged past prepandemic levels, attendance at U.S. theme parks hasn't yet gotten there."
- Six Flags shares are down more than 62% over the last five years, while Cedar Fair shares are down more than 30%.
- Their combined attendance over the last 12 months was 48 million.
What to watch: The deal will need to past muster with regulators, but the companies said they "have minimal market overlap."