Dubai World to acquire 9.5% of MGM Mirage and 50% of its CityCenter Las Vegas development.
Dubai World and MGM MIRAGE have announced that they have signed definitive agreements to form a long-term strategic relationship whereby Dubai World will invest approximately US$5 billion in MGM MIRAGE consisting of a US$2.7 billion investment in CityCenter and up to US$2.4 billion in purchases of MGM MIRAGE common stock. The companies will enter into a 50/50 joint venture in the landmark CityCenter development in Las Vegas and Dubai World will acquire a significant minority equity position in MGM MIRAGE.
The joint venture, CityCenter Holdings LLC, will be owned equally by MGM MIRAGE and Infinity World Development Corp., a wholly-owned subsidiary of Dubai World. Upon closing, CityCenter Holdings LLC will own 100 percent of CityCenter, a mixed-use luxury residential, resort and retail complex currently being developed by MGM MIRAGE on the Las Vegas Strip.
CityCenter, a mixed-use luxury development by MGM Mirage currently under construction in Las Vegas.
Sultan Bin Sulayem, Chairman of Dubai World said, "The announcement today brings together two companies known for creating landmark developments that have the ability to change the face of luxury living and destination tourism. In seeking international expansion, we chose a partner who would complement our strengths in large-scale development as well as share our view of investing for the long-term. We were attracted by MGM MIRAGE's superior assets, locations, and brands. Terry Lanni and his management team have a proven ability to create extraordinary customer experiences that generate demand and earn customer loyalty.
"Our vision is to create a global portfolio of signature properties that will create value for generations to come. The unprecedented CityCenter will redefine the luxury lifestyle and incorporate world-class elements of fine art and design, fulfilling our goal of creating landmark developments while further expanding into the important US real estate market. We look forward to making this project an international success and sharing in other opportunities for expansion with MGM MIRAGE," continued Sultan Bin Sulayem.
Terry Lanni, Chairman and CEO of MGM MIRAGE, said: "This is a transforming event for MGM MIRAGE and Las Vegas. This partnership with Dubai World brings us a relationship with an internationally-respected developer of large-scale luxury properties that attract an international clientele. Dubai World's proficiency in real estate, combined with our company's operational expertise, strong brands and world-renowned resorts, creates competitive advantages that we believe will benefit all of our stakeholders. We are extremely pleased to be working with Dubai World. We have a tremendous amount of respect for Sultan Bin Sulayem and all that his company has accomplished.
"This transaction is immediately accretive to long term earnings and will have a profound impact on our balance sheet. Dubai World is making a significant investment in our company that will greatly increase our growth and earnings. We welcome Dubai World's long term commitment to our company through the joint venture and these share purchases," Mr. Lanni continued.
Targeted for completion in late 2009, CityCenter is a luxury urban metropolis defined by its dazzling vertical architecture rising from the Las Vegas Strip. CityCenter's design team includes many of the world's foremost architects such as Daniel Liebeskind, Lord Norman Foster, and Rafael Viñoly. The self-contained city-within-a-city will include: A dramatic Cesar Pelli-designed 4,000-room resort; approximately 470,000 square-feet of retail and entertainment space; 2,650 luxury condominiums and condo-hotel units in multiple towers; and two 400-room boutique hotels, one of which will be managed by luxury hotelier Mandarin Oriental.