When it comes to theme parks and amusement parks, Disney and Universal get all the press. However, when it comes to size, other companies like Cedar Fair and Six Flags are the true behemoths, with both having many more locations in North America. If rumors turn out to be true, they could get even bigger, as it's being reported that Six Flags and Cedar Fair are in merger talks. If this happens, an announcement could come as early as Thursday morning.
Reuters is reporting that sources have told them that the talks of a possible merger are happening, though it’s unclear at this point if the two sides will reach an agreement. Six Flags and Cedar Fair have discussed merging previously without coming to a deal, so that certainly could be where this ends up going as well. That said, with Cedar Fair set to have its quarterly earnings call in the morning, one has to wonder if we're on track for a huge announcement.
If Cedar Fair and Six Flags do merge, they would become an absolutely massive entertainment enterprise based on footprint alone. Cedar Fair currently owns 11 amusement parks and four water parks, while Six Flags holds 15 amusement parks and 19 water parks. A 16th park in Saudi Arabia is currently under construction.
While both Six Flags and Cedar Fair have struggled recently, with attendance and revenue not bouncing back from the pandemic the way they likely anticipated, a merger would likely help both companies financially if an economic downturn happens, leading to less consumer spending on things like amusement parks. They should be able to weather such a storm better as a single larger company than they would as two smaller companies.
Six Flags has licensing deals with Warner Bros. that allow DC and Looney Tunes characters to appear on attractions and in the parks. While Warner Bros. has its own theme parks overseas, it has yet to open one in North America. Cedar Fair has the current licensing deal for Charles Schulz’s Peanuts characters. It seems likely that we could see some of these popular characters appear in the other parks if a merger happens, and it’s not hard to imagine other studios with popular IP not being interested in licensing deals with a new company that has so many locations.
Cedar Fair was the target of acquisition as recently as 2021 when SeaWorld reportedly offered $3 billion to purchase the company, a deal that Cedar Fair ultimately rejected. On the one hand, the previous attempt at acquisition may indicate that a merger is more likely, though the fact that Cedar Fair ultimately said no may indicate that it’s willing to do so again unless the deal is the right one. This will certainly be a very interesting earnings call.