Dubai World Making $5B Investment in MGM
Wednesday August 22, 9:56 am ET
By Michelle Chapman, AP Business Writer
NEW YORK (AP) -- Dubai World, a government-owned holding company, will invest about $5 billion in MGM Mirage, the casino operator said Wednesday.
The investment includes $2.7 billion for CityCenter and up to $2.4 billion in purchases of MGM Mirage common stock.
The deal will give Dubai World a minority stake in MGM, with both companies entering a joint venture for CityCenter. The joint venture, CityCenter Holdings LLC, will be owned equally by MGM Mirage and Infinity World Development Corp., a subsidiary of Dubai World. The joint venture will fully own the CityCenter development when it closes.
MGM shares jumped more than 10 percent, or $7.53, to $81.85 at the open of trading Wednesday.
Dubai World made headlines last year when its subsidiary, Dubai Ports World, was forced to sell its U.S. port operations after an uproar in Congress over security concerns.
Dubai World this month signed an agreement for control of the Barneys New York department store. A division of Dubai World spent $100 million this year to buy the QE2, the majestic ocean liner that has carried millions of people across the Atlantic during its 40-year history.
The company plans to turn the giant passenger ship into a first-class floating hotel, retail and entertainment destination, berthed off Dubai's manmade Palm Jumeirah island.
The joint venture with MGM Mirage is expected to close by the end of the year.
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