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Sands Completes $6.25B Venetian Sale, Focus Now on Asia & Digital
By Jeff Osienya Feb 26, 2022 IndustrySin City gaming juggernaut Sands Corp has finally completed the divestment of The Venetian Resort properties in a $6.25 billion deal. Sands is now setting its sights exclusively on the lucrative Asian market, where it’s been collecting the most revenue.The Venetian Palazzo and The Venetian Expo that make up the Venetian Resort have now been officially sold. Las Vegas Sands, the previous owners of this grand resort, sold it for a whopping $6.25 billion fee in a well-structured deal to its new owners Apollo Global Management and VICI Properties Inc. The sale was first announced in March 2021, and its completion comes over a year after the death of the company’s biggest shareholder, Sheldon Adelson, in what is sure to be a bittersweet moment for the company.
During the announcement of the sale completion, the company paid tribute to him, saying, “As we announce the sale of the Venetian resort, we pay tribute to Mr. Adelson’s legacy while starting a new chapter in the company’s history.”
The new owners of the iconic Sin City property shared the payment responsibilities as follows: Apollo will pay $1.05 Billion in cash and $1.2 Billion in the form of a term loan credit and security agreement, whereas VICI Properties will pay $4 Billion to Las Vegas Sands. The terms of the deal are structured such that Apollo will handle the Venetian’s cash flow and operations with VICI buying the resort’s land as a real estate investment trust. Having acquired land, the agreement between the co-owners states that Apollo will be paying rent to VICI henceforth. Goldman Sachs and Co took the lead in the landmark deal through its revered financial advisory capacity.
The President and Chief Operating Officer of VICI, John Payne, expressed optimism for the future after the purchase of Venetian, stating that:
Quote“We are thrilled to complete the acquisition of this remarkable world-class asset. Over the past two quarters, the Venetian’s financial results far exceeded our initial underwriting expectations, demonstrating the significant attractiveness of the property to consumers and proving the relevance of Las Vegas as a global entertainment destination.”
The Venetian team seems to be taking the news quite well, seeing that very few changes are expected to occur. For example, the leadership of the Venetian is set to stay as it presently is constituted even as Apollo takes over the property. Venetian Resort CEO George Markantonis expressed his enthusiasm to continue leading operations under Apollo, saying:
Quote“As a standalone company with the tremendous institutional knowledge and capabilities of our management team and broader workforce, coupled with the strategic partnership of Apollo, we have an exciting opportunity to build on our past successes while capturing future opportunities. We’re very well-positioned across all Las Vegas categories — hospitality, meetings and events, gaming, and entertainment — and believe we are well-positioned for long-term growth.”
New Asian Dawn for Las Vegas Sands
After over two decades of operating in the U.S, the gaming and hospitality giant founded by the late casino mogul Sheldon Adelson is calling it quits in the U.S. However, the close of the 20 years plus chapter brings a window of opportunity to exploit the Asian market to the fullest. According to Sands Chairman and Chief Executive Officer Robert Goldstein, there is already a clear plan for using the $6.25 billion gained from the sale of Venetian Resort. He said in part:
Quote“Looking forward from the sale, we believe our strong balance sheet and an industry-leading portfolio of Integrated Resorts in Macao and Singapore position the company to experience a new era of opportunity and growth. The top priorities for our company include heavily reinvesting in our portfolio in Asia while at the same time pursuing new land-based development opportunities and executing our long-term strategy for participating in the digital marketplace.”
The company is also recovering from the glaring financial shortfall in 2020. Owing to the Covid-19 pandemic, Sands posted a loss of $1.69 billion, the biggest loss the company has ever seen in its operating history in Sin City. While this was to be expected in the midst of a pandemic that hit the land-based gaming industry hard, urgent steps needed to be taken to recover – one of them being the sale of The Venetian. Additionally, redirecting its sole focus to Asia is a smart move because most of its revenue has been coming from Macau and Singapore.
It is also no secret to anyone in the global gaming scene that Macau is fast developing into one of the world’s biggest gaming hubs. And so, it is a wise move for any company to tap into the burgeoning Asian market. In fact, the plans for an Asian revamp are already in place if the recent reports in Asia are anything to go by. The company has already rolled out strategies to expand its portfolio in the world’s largest continent while pursuing new land-based opportunities.
Key evidence of the Asian expansion was the announcement of a $1 Billion reinvestment at the Marina Bay Sands in Singapore. The upgrade here involves revamping the hotel rooms and suites in Towers 1 and 2. Another significant upgrade in the continent by Sands is the $2.2 Billion renovations of the Londoner Casino in Macau.
Headquarters Remain in Las Vegas
Even though Sands is exiting the American stage, the company maintains that its headquarters will remain in Las Vegas, and it will stay actively involved in community affairs. Following the sale, there is general optimism of the revamp of the Las Vegas casino and hospitality scene to beyond its former glory after the impact of the Coronavirus pandemic. However, it seems Sands will not be part of that future in a big way from now on.
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