0
0
What You Need to Know!
- The new company will operate under the name “Six Flags”.
- “The combined company will also offer expanded park access to season pass holders along with an enhanced, combined loyalty program featuring additional perks.”
- Rebranding – Per the reps on the conference call today, since each park has a unique brand and identity, they will look to enhance the regional branding instead of rebranding the parks.
- New HQ will be in Charlotte, North Carolina but Sandusky will keep its administrative and finance offices.
- Combined Intellectual Products (IP) will be Peanuts, DC Comics, and Looney Tunes.
- Merger expected to complete by mid 2024 (end of Q2).
- The Board will consist of 6 Six Flags board members and 6 Cedar Fair Board Members.
- Six Flags CEO Selim Bassoul will become the Chairman of the Board.
- Cedar Fair CEO Richard Zimmerman will be the President and CEO.
- Primary motive for merger is monetary.
- Expecting a savings of $200 million as a result of the merger.
- Expecting additional revenue as a combined company, $3.8 billion in total per year
- Expecting additional growth to EBITDA
- “Six Flags looks to take advantage of Cedar Fair methods to improve guest experiences. “The companies expect to leverage Cedar Fair’s recent park investment experience to accelerate the transformation underway across Six Flags’ portfolio”
- In our opinion, Cedar Fair gains two IPs for new experiences , DC Comics and Looney Tunes.
Full Review:
The Announcement
On Thursday, November 2nd, 2023, Cedar Fair (Sandusky, Ohio) and Six Flags (Arlington, Texas) have entered a definitive merger agreement of equals. In this scenario, neither Cedar Fair nor Six Flags will be buying the other, but both companies will be combining into a single company called Six Flags. Cedar Fair and Six Flags posted the announcement on the respective websites.
Cedar Fair and Six Flags Background
Cedar Fair owns and operates 15 parks , 4 of which are separately gated water parks, and 11 resorts/places to stay.
Cedar Fair’s flagship park Cedar Point, is located in Sandusky, Ohio where the Cedar Fair Headquarters was previously located. Cedar Fair purchased their first park in 1983, Valley Fair, to form Cedar Fair once the two parks became under single ownership. Over the years Cedar Fair purchased additional individual parks, but in 2006, Cedar Fair purchased multiple Paramount Parks (Kings Island, Carowinds, Kings Dominion , Canada’s Wonderland, and San Francisco Great America).
Six Flags is the world’s largest regional theme park company with 27 total parks in the US, Canada, and Mexico. Six flags has been in operations for the past 62 years and has entertained millions of guests, per the announcement linked above.
The Merger
The new company will operate under the name “Six Flags” and will trade on the NYSE exchange under the Cedar Fair symbol FUN.
The new company headquarters will be located in Charlotte, North Carolina and it will maintain offices in Sandusky for administrative and finance operations.
Although its not very clear, but the reps for the company have stated “The combined company will also offer expanded park access to season pass holders along with an enhanced, combined loyalty program featuring additional perks.”
However, during the recorded conference call, the reps mentioned that the majority of the parks are “regional” parks and, for the most part, not considered destinations, although some operate as a destination park. They also mentioned on the call that most of the guests are within a 2-2.5 hour drive. A smaller number travel to multiple parks, and they will look for ways to allow season pass holders to visit all the parks. We can expect to more information to come on this topic.
Another key point in the merger is the combination of Intellectual Properties (IPs) between the parks. With the merger, the Six Flags IPs and Cedar Fairs will combine to include Peanuts, DC Comics, and Looney Tunes. In the announcement they mentioned they will use these IPs “to develop engaging new attractions enabled by compelling characters, environments, and storytelling.”
An additional note of the merger, is that approval for the merger still has to be approved by the Six Flags Investors, although the primary shareholder, who owns approximately 13% of the total six flags stock, has signed off in approval of this merger. The Cedar Fair stockholders approval is not required.
Cedar Fair stockholders will be issued stock in a 1-1 for the new company, but Six Flags stock holders will be issued .58 stock in the company. Our thought is that Six flags stock is currently worth more than Cedar Fair stock. Six Flags stock holders will also be issues $1 per unit of stock held. Cedar Fair Stock holders will control the majority of the existing stock at 51% and Six Flags will be slightly below 49%.
Our Thoughts!
This announcement definitely comes as a shock to us here at Kerney-cation. Our home park is Cedar Point and we regularly visit Kings Island. We have also visited Carowinds and Knott’s Berry Farm with our Prestige Plus Pass.
We have some concerns regarding the merger, since the guest experiences reported at Six Flags has not been very good over recent years. We like the idea of this merger if it means improving on some of the Six Flags parks, but not negatively affecting any of the Cedar Fair operations.
We do like the idea of investing in some Cedar Fair parks that might have been skipped out on, looking at you Michigan’s Adventure!
We also hope that existing attractions at Kings Island and Cedar Point remain how they are today. Like the reps mentioned on the conference call today, we think that Kings Island and Cedar Point operate well within their regions and do not require a full rebranding to attract guests.
However we would welcome some of the Six Flags IPs to the parks for “New” attractions or entertainment. It would be fun to see some DC or Looney Tunes characters at Cedar Point in addition to the existing Peanuts characters.
We would also love to be able to visit the pre-existing Six Flags parks as part of our season pass. We just have concerns on what the pricing would be for the “Platinum” pass or “All Park Pass”. Hopefully the price isn’t raised, at least by too much!
We also have concerns about the Six Flags Platinum pass for all parks, as it does not include water park access or free parking to parks not considered your “home” park. Hopefully the Cedar Fair benefits blend into the new existing Six Flags Season Pass.
Lastly, this is technically a merger, but it feels like Six Flags is buying Cedar Fair. The Six Flags CEO will be Chairman of the Board over the Cedar Fair CEO, and Six Flags is a bigger company in this scenario with more theme parks.
Six Flags has some operating issues and can see the great guest experiences that Cedar Fair has been delivering. Cedar Fair can help Six Flags with their dwindling attendance and guest experience numbers and Cedar Fair Benefits from seasonal stability and the addition of two new IPs.
I think it’s a win – win for both sides, and I am excited for what the future holds for this new “Six Flags” and our home park, Cedar Point! Please don’t rename it to Six Flags Cedar Point!
Our Lingering Questions!
- If Cedar Point will not be rebranded, can we expect to see new rides themed to DC Comics or Looney Tunes?
- Will any existing rides be rebranded to DC Comics or Looney Tunes?
- Can we expect to see Peanuts characters at Six Flags parks?
- What will the 2025 Season Pass model look like? Will it adopt the Six Flags model (Platinum, All Park Platinum) or Cedar Fair Model (Gold , Prestige)
- Will there be a dining plan at all parks, including Six Flags?
- Will there be “Six Flags” logos at Cedar Fair parks. Although not rebranded, what will the paper cups, plates, employee uniforms look like? Any changes? No Changes?
- Will any parks get “Geauga Laked”, aka stripped for parts and moved to other parks?
- Please keep Tony Clark and don’t mess with him and Cedar Point.
Leave us a comment below on what you think of the merger!
