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Sands Sells Venetian and Expo Center for $6.25b to Focus on Asia
By Jeff Osienya Mar 03, 2021 IndustrySands exits Sin City and drops the Vegas tag after announcing the sale of its properties in the region to Vici and Apollo in a multi-billion-dollar deal. The casino juggernaut is now setting its sights on its more profitable operations in Asia.Las Vegas Sands Corp, the pioneer of the convention-based integrated resort is selling its distinguished properties in Sin City: The Venetian and Palazzo resorts and the Sands Expo and Convention Center. Vici Properties, Caesars Entertainment Inc’s real estate trust has joined forces with Apollo Global Management Inc, an alternative asset management company founded by Leon Black, to buy the two properties in a $6.25 billion transaction.
Vici Properties is purchasing the land and real estate assets of the iconic Las Vegas Sands properties for $4 billion, whereas New York-based Apollo will spend $2.25 billion to acquire Venetian’s operating company.
Per the transaction filing with the Securities and Exchange Commission, Apollo, the private equity firm will pay a cash sum of $1.05 billion for the purchase, and the remaining $1.2 billion payment will be in the form of a term loan credit from seller financing. As is the norm, the deal is subject to standard closing conditions and approvals from industry and jurisdictional regulatory bodies.
A New Era of the Sands Empire
By selling the two properties, Las Vegas Sands will no longer have a footprint in the US gaming mecca and as such, the company is also effectively dropping its ‘Las Vegas’ prefix, to be known as Sands from now on.
The Venetian was once the cornerstone of the company and it is the golden goose that slingshot Las Vegas Sands to the throne of the casino gaming sector as the world’s largest operator. However, due to shifts in the market and the opening up of more lucrative opportunities in Asia, the iconic resort’s importance to the entire brand has since diminished.
Similarly, the company’s larger Las Vegas business wasn’t significant either after a 2-decade stint and was only bringing in a small fraction of the money. In 2019 for instance, only 13% of the company revenue in the financial year came from Las Vegas, with the lion’s share being minted from the Macau and Singapore businesses.
Robert Goldstein, the new Chairman, and CEO of Sands expressed his conviction in the latest move saying;
Quote"The Venetian changed the face of future casino development and cemented Sheldon Adelson's legacy as one of the most influential people in the history of the gaming and hospitality industry.
As we announce the sale of The Venetian resort, we pay tribute to Mr. Adelson’s legacy while starting a new chapter in this company’s history. This company is focused on growth, and we see meaningful opportunities on a variety of fronts. Asia remains the backbone of this company and our developments in Macao and Singapore are the center of our attention."
Goldstein took over as Chairman and CEO from Sheldon Adelson the company’s founder, after he passed on 11th January following complications from the treatment process of rare cancer known as non-Hodgkin lymphoma.
Company Revenue from Sin City Operations Wasn’t Much
Even before the death of its founder, the now rebranded Sands casino operator had been looking for fresh opportunities in the hospitality industry and divestment of properties whose revenue was diminishing was part of the plan.
Last year in October, company executives had even disclosed that they were looking into exiting Las Vegas to focus their resources on their Asian business. The company's Macau operations consist of six resorts, and in Singapore, Sands runs one of the most outstanding integrated resorts in the region.
In his press briefing, Goldstein gave a hint of what we can expect from the Sands brand in its new chapter by adding that;
Quote"We will always look for ways to reinvest in our properties and those communities. There are also potential development opportunities domestically, where we believe significant capital investment will provide a substantial benefit to those jurisdictions while also producing very strong returns for the company."
Patrick Dumont, the president and Chief Operating Officer of Sands also released a statement in support of the move as follows;
Quote"Our long-held strategy of reinvesting in our Asian operations and returning capital to our shareholders will be enhanced through this transaction. Additionally, as our industry continues to evolve, particularly as it relates to the digital marketplace, we are committed to exploring those possibilities."
In line with Dumont’s statement, the company already discussed the possibility of launching internet-based operations in recent Q4 talks and the general 2020 performance particularly after the negative impact of the Coronavirus pandemic.
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