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NEW YORK CITY-The Blackstone Group’s Merlin Entertainments Group has purchased the Tussauds Group for $1.9 billion. Dubai International Capital LLC sold the visitor attraction company and will keep 20% of its previous ownership. The all cash transaction will make Merlin the second largest attraction operator in the world; second only to Disney.

“Tussauds and Merlin are very complementary businesses and there is an obvious commercial logic in bringing them together,” says Sameer Al Ansari, CEO of DIC. “As a reflection of our confidence in this deal, DIC will retain 20% of the larger business and we hope to share in the benefits of its future profitable growth.”

The combined Merlin and Tussauds will operate 50 attractions and four hotels in 12 countries on three continents. Some of the better known attractions in the portfolio include Madame Tussauds, Legoland, Sea Life and British Airways London Eye. There are Madame Tussauds wax museums in Manhattan and Las Vegas, with plans to open an additional location in Washington, DC.

Management of the combined companies will include Merlin’s chief executive Nick Varney, as CEO, and Tussauds’ chief executive Peter Phillipson becoming non-executive chairman. Merlin’s CFO Andrew Carr will continue as CFO and Tussauds’ CFO Rob Roger is in charge of heading the integration process.

“The combination of the Merlin and Tussauds brands, people, and operating expertise will create an exciting and world-beating global entertainment company,” Varney says. “With such iconic brands, the expanded Merlin will not only have strong development potential, but also an amazingly robust and high value portfolio.”

Merlin will now focus on expanding the brands with a particular focus in the North American market. “Our ambition is to build on this to become the world leader in location based, branded, family entertainment,” Varney says. “It not only expands our business both geographically and demographically, but also underlines our objective to build a balanced portfolio. The combined Group also has the resources and expertise to focus on accelerating current expansion plans for all the brands, particularly in North America.”

Specifically, the firm plans to accelerate opening additional Madame Tussauds museums across the world. The new Washington, DC location is expected to open in October and will be located in the former Woodward & Lothrop department store. The museum will have a particular focus on politics and American history.

Merlin was purchased by Blackstone in May 2005 from Hermes Private Equity for more than $200 million. Under Blackstone’s management Merlin bought the Legoland theme parks in August 2005 and Gardaland, Italy’s largest theme park, in October 2006.

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