Disney and Universal Studios now have a huge new theme park rival

Walt Disney Co. DIS and Comcast's CMCSA Universal Studios' theme parks are constantly expanding their facilities with new rides, attractions and lands, and even opening new parks, in a battle to attract the most guests and revenue.

Universal has the biggest project underway with its Epic Universe theme park, a third gate at Universal Orlando Resort that is set for opening in the first half of 2025. Universal has said that Epic Universe is developing themed lands, including Wizarding World of Harry Potter - Ministry of Magic, Super Nintendo World, Universal Classic Monsters and How to Train Your Dragon.

Related: Universal Studios follows Disney World in raising prices

Universal Studios Hollywood in February 2023 opened its new Super Nintendo World land with the popular ride Mario Kart: Bowser's Challenge and the Toadstool Cafe restaurant.

New land and rides coming to Disney parks

Disney World is planning a new land for its Animal Kingdom as it will close DinoLand U.S.A. and bring in The Tropical Americas land that will include attractions in the "Encanto" and Indiana Jones themes.

Splash Mountain at Disney World's Magic Kingdom in Orlando closed on Jan. 23, 2023, while the same ride closed May 31, 2023, at Disneyland in Anaheim, Calif. Both rides will be rethemed as Tiana's Bayou Adventure and reopen in 2024.

The Disney and Universal Studios theme parks' rivalry just got more interesting as Six Flags Entertainment SIX and Cedar Fair FUN on Nov. 2 entered into a merger agreement that would create a single, combined $8 billion amusement park company comprised of 27 amusement parks, 15 water parks and nine resort properties across 17 states, Canada and Mexico.

Merger may increase value of combined company

The merger is expected to increase the value of the combined company by about $200 million in three years after the deal closes from administrative and operational cost savings and increased revenue.

Six Flags and Cedar Fair, which license the intellectual property of Looney Tunes, DC Comics and Peanuts, believe they have minimal market overlap of park operations. The new company will seek to create a more engaging and immersive guest experience and will offer expanded park access to season pass holders, along with an enhanced, combined loyalty program featuring additional perks, the statement said.

It will be interesting to see what new attractions and events the new combined company will introduce as the current individual companies compete against Disney, Universal and each other with various seasonal themed events.

In the 12 months through the end of the third quarter of 2023, the two park operators welcomed a combined 48 million guests in their venues and generated a combined $3.4 billion in revenue, $1.2 billion in adjusted EBITDA and $826 million of free cash flow. The combined company believes its increased free cash flow will provide it with greater flexibility to invest in new rides and attractions, more food and beverage selections, additional in-park offerings, and cross-park initiatives like consumer technology and enhanced guest services. 

Upon closing of the transaction in the first half of 2024, the combined company, to be headquartered in Charlotte, N.C., will operate under the name Six Flags and trade under the ticker symbol FUN on the New York Stock Exchange, the company said in a statement.

When the deal is done, Cedar Fair's President and CEO Richard Zimmerman will serve in the same roles for the combined company, while Six Flags President and CEO Selim Bassoul will serve as executive chairman of the new company's board of directors that will consist of six directors from the Cedar Fair board of directors and six from the Six Flags board. Cedar Fair Chief Financial Officer Brian Witherow will serve in the same role in the new company, and Six Flags CFO Gary Mick will serve as the new company's chief integration officer.

The merger is expected to close in the first six months of 2024 after receiving Six Flags shareholders' approval. Cedar Fair unitholders' approval is not required.

Shares of Six Flags rose 0.4% to $22.45 in after-hours trading on Nov. 2, while Cedar Fair shares rose 1.32% to $37.49.

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