(Reuters) – Las Vegas Sands Corp , founded by late casino mogul Sheldon Adelson, will sell its Vegas properties for $6.25 billion, exiting the U.S. gambling hot spot after three decades to focus on Asia, home to the world’s largest gambling hub, Macau.
The sale comes nearly two months after the death of Adelson – widely credited with helping transform the Chinese territory of Macau from a den of hard core gambling parlors into a center of luxury resorts and convention centers with revenue that now dwarfs Las Vegas.
Las Vegas Sands said the deal underscores its strategy of reinvesting in its Asian operations, with a focus on Macau and Singapore. Macau and Singapore accounted for 48% and 35% of the company’s total revenue in 2020, respectively, according to Refinitiv Eikon data.
“The deal further strengthens the company’s balance sheet to fund future growth in other domestic and global markets,” Jefferies analysts said, viewing the sale as a net positive.
The properties being sold by the casino operator include the Venetian Resort Las Vegas and the Sands Expo and Convention Center. A possible sale of the properties was widely reported late last year.
The gambling industry, which thrives on air travel and large groups of people in close proximity, has been one of the hardest hit by the COVID-19 pandemic.
For 2020, Las Vegas Sands reported a loss of $1.69 billion, the biggest in its history, as travel restrictions and lockdowns brought the gambling industry to a virtual stand-still. The company’s cash and short-term investments halved to $2.12 billion at the end of 2020 from 2019.
(Graphic: COVID-19 pandemic hits casino operators in 2020: https://graphics.reuters.com/LVSC-DIVESTITURE/azgpoegwbpd/chart.png)
However, widespread vaccinations are expected to aid in the travel recovery. Last month, rival MGM Resorts signaled a pickup in demand later this year as vaccines become more widely available.
Apollo Global Management Inc’s affiliate-managed funds will buy the operating company of the Venetian for $2.25 billion and VICI Properties will buy the land and real estate assets of the Venetian for $4 billion.
Apollo’s Alex van Hoek said the investment “underscores our conviction in a strong recovery for Las Vegas as vaccines usher in a reopening of leisure and travel in the United States and across the world.”
Shares of Las Vegas Sands were up 1.2% at $65.74 in morning trading. The S&P 500 casinos and gaming index has gained 15.2% this year, compared to a 3% rise in the S&P 500.
(Reporting by Sanjana Shivdas and Noor Zainab Hussain in Bengaluru; Additional reporting by Manojna Maddipatla. Writing by Sweta Singh; Editing by Maju Samuel, Bernard Orr)