US theme-park operators Cedar Fair, Six Flags to merge

[November 02, 2023]  (Reuters) - U.S. amusement park operators Cedar Fair and Six Flags Entertainment on Thursday agreed to merge to fortify their business amid a slowdown in consumer spending.

The combined entity will have a pro forma enterprise value of about $8 billion, the companies said, without disclosing further financial details of the deal. 

People ride a roller coaster at Six Flags Magic Mountain amusement park on the first day of opening, as the coronavirus disease (COVID-19) continues, in Valencia, California, U.S., April 1, 2021. REUTERS/Lucy Nicholson

Through the deal, the parties will be seeking "a more robust operating model and a strong revenue and cash flow generation profile" as higher borrowing costs and a discretionary spending curb hurts the theme-park operators.

Cedar Fair owns 11 amusement parks and four gated outdoor water parks in 10 U.S. states and in Toronto, Ontario. Six Flags is the largest operator of water parks in North America, with 27 parks across the United States, Mexico and Canada.

Cedar Fair unit holders will get one share in the combined company and Six Flags shareholders will get 0.58 shares, for every share they hold, they said in a statement.

On Wednesday, shares of the companies closed up about 6% after Reuters reported that they were exploring a potential merger. They were down about 10% so far this year.

WSJ reported on Thursday that the all-stock deal would be about $2 billion, citing company executives.

Cedar Fair has a market value of $1.9 billion while Six Flags has a value of $1.75 billion, as of Wednesday's close.

Cedar Fair shareholders would own about 51.2%, and those of Six Flags would own approximately 48.8% of the combined company on a pro forma basis.

(Reporting by Savyata Mishra; Editing by Savio D'Souza and Shinjini Ganguli)

[© 2023 Thomson Reuters. All rights reserved.]
This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.