The Federal Trade Commission approved Penn National Gaming’s $2.8 billion buyout of Pinnacle Entertainment Monday, clearing one of the final hurdles needed to complete the merger between the two gaming companies.
In a statement posted to the FTC website, the agency approved the transaction pending Boyd Gaming Corp. acquiring three Pinnacle-operated casinos in Cincinnati, St. Louis and Kansas City.
When the Penn-Pinnacle deal was announced late last year, Boyd had agreed to acquire the operations of Pinnacle’s two Ameristar casinos in Missouri and the Belterra gaming brands in Indiana and Ohio for $575 million. Boyd will sign a lease agreement with real estate investment trust Gaming and Leisure Properties, which is the landlord for the Pinnacle-owned resorts.
After adding Pinnacle’s 12 remaining casinos, Penn National will become the largest U.S. regional gaming operator with 41 properties in 20 jurisdictions.
The FTC said in its statement that Penn and Pinnacle “are close and vigorous competitors” in the St. Louis, Kansas City, and Cincinnati markets.
“In St. Louis, the acquisition would reduce the number of competitors from four to three, resulting in a highly concentrated market with just two properties that would compete with Penn, only one of which has a casino that provides significant competition,” the FTC said. “In both Kansas City and Cincinnati, the acquisition would reduce the number of competitors from five to four and would substantially increase concentration levels.”
Penn National released a statement confirming the FTC’s decision, but did not comment.
The FTC had issued a second request for information on the deal in March.
So far, 13 state gaming jurisdictions had approved the Penn-Pinnacle merger.
Nevada’s Gaming Control Board and Gaming Commission will both take up the matter on Wednesday.
Shareholders of both companies approved the transaction in March.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
