InBev sells all parks for 2.7 Billion

October 7, 2009 by · 11 Comments
Filed under: Save Busch Gardens 

Adding insult to injury the owners of the terrible Six Flags will now put the final nail in the coffin of all Busch Theme Parks.

CHICAGO (MarketWatch) — Anheuser-Busch InBev said Wednesday (10/07/2009) that it will sell its entertainment business, including theme parks like Sea World and Busch Gardens, to the Blackstone Group for as much as $2.7 billion.

The final purchase price will involve a cash payment of $2.3 billion on closing and the right to participate in Blackstone’s returns that is capped at $400 million.

For that, Blackstone /quotes/comstock/13*!bx/quotes/nls/bx (BX 14.51, -0.02, -0.14%) gets Anheuser-Busch InBev’s /quotes/comstock/13*!bud/quotes/nls/bud (BUD 46.80, +0.14, +0.30%) subsidiary Busch Entertainment Corp., which operates 10 amusement parks in the U.S.

The move to sell the parks has been anticipated since InBev swallowed up the American brewer last year, ballooning its balance sheet with billions in additional debt.

While Carlos Brito, chief executive of Anheuser-Busch InBev, said the parks are “a high-performing asset,” they are not “a core business for Anheuser-Busch InBev.”

He added that the sale is “another important milestone in our commitment to de-leverage the company and will also allow us to continue to focus on our core brewing business.”

Blackstone will finance the acquisition via senior secured credit facilities and debt provided by Bank of America’s Merrill Lynch, Barclays, Deutsche Bank, Goldman Sachs and Mizuho Corporate Bank Ltd.

The Blackstone Group LP (NYSE:BX) — already a 50% owner of Universal Orlando, which competes head-to-head with just down the road Walt Disney World — is gearing up to greatly increase its footprint in Central Florida. According to the Disney Blog: “Apparently high ranking officials from Blackstone have been seen walking around SeaWorld.”

Busch Entertainment Co.’s theme parks include:

* Busch Gardens Tampa Bay (Tampa, Fla.)
* Busch Gardens Williamsburg (Williamsburg, Va.)
* SeaWorld Orlando (Orlando, Fla.)
* SeaWorld San Antonio (San Antonio)
* SeaWorld San Diego (San Diego)
* Discovery Cove (Orlando, Fla.)
* Aquatica (Orlando, Fla.)
* Adventure Island (Tampa, Fla.)
* Water Country USA (Williamsburg, Va.)
* Sesame Place (Langhorne, Pa.)

Additionally, Blackstone’s Merlin Entertainments Group has stakes in Six Flags Inc., Legoland theme parks and Madame Tussauds.

Blackstone and Universal Studios Inc. co-owner NBC Universal Inc. are already making major moves in the central Florida theme park market. Although it is staring down the barrel of $950 million in debt that needs to be refinanced by April 2010, Universal Studios is making major upgrades to its two Florida parks: Universal Studios Orlando and Islands of Adventure.

The Universal Studios park unveiled a new headliner coaster this summer, expecting to draw crowds away from cross-town rival Walt Disney World. But it’s on 2010 that the company has bet the farm, when Universal plans to open in Islands of Adventure a new 20-acre “Wizarding World”-themed land based on the immensely popular Harry Potter books and movies.

While an all-out war for theme park dominance may be a dream come true for central Florida tourists and businesses, there are a number of things that could prevent any such thing from happening. Blackstone Group has for the most part been a passive owner in the Universal parks, allowing partner NBC Universal to primarily run them. Additionally, the private equity firm partnership with NBC reportedly bans it from owning competing parks in central Florida. One can imagine that NBC Universal’s parent General Electric Co. (NYSE:GE) would not welcome ramped-up competition to its own parks from its erstwhile partner.

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