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Caesars deal would put Harrah's on top

LAS VEGAS -- Harrah's Entertainment Inc.'s $5.2 billion deal to buy Caesars Entertainment Inc. would rearrange the industry's hierarchy, creating the world's largest gambling company and leaving two casino giants controlling most of the Las Vegas Strip's most-prized megaresorts.

The blockbuster deal revealed yesterday eclipses last month's $4.8 billion MGM Mirage merger with Mandalay Resort Group.

Harrah's not only leapfrogs MGM Mirage on the world stage, it gains the high-profile place it has long sought in Las Vegas -- if regulators approve the deals, possibly by next year.

The transactions would leave 15 major hotel-casinos in the gambling capital in the hands of the two combined companies, and both competing for a broad spectrum of tourists. Of the 32 hotel properties on the Strip, about 25 are considered major.

''These are the right assets for the development of our strategy," Gary Loveman, Harrah's president and chief executive, said in a conference call yesterday.

Under terms of the deal, Harrah's would pay $1.8 billion in cash and exchange about $3.4 billion in Harrah's stock for all shares of its Las Vegas-based rival.

Harrah's also would assume about $4.2 billion in Caesars Entertainment debt.

Harrah's has partnered with the Narragansett Indian Tribe to build a casino in West Warwick, R.I. The proposal is subject to voter approval. The state Legislature is expected to convene this month to try to override Governor Donald Carcieri's veto of a measure that would call a referendum in November.

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