Six Flags and Cedar Flags theme parks merging in $8 billion deal

The companies that own the Magic Mountain and Knott's Berry Farm theme parks are merging in an $8 billion deal that will consolidate dozens of theme and water parks across the country. The announcement was made on Thursday.

Six Flags, which owns Magic Mountain in the Santa Clarita Valley, and Cedar Fair, which owns Knott's Berry Farm in Buena Park, operate a combined 27 amusement parks and 15 water parks in the United States, Canada and Mexico.

Cedar Fair said the new company will provide opportunities to increase investments in the parks, which could translate into higher demand, according to media reports.

The new company will keep the Six Flags name and trade under the Cedar Fair stock ticker FUN.

The merger also puts Magic Mountain and Knott's Berry Farm in position to compete with popular Southern California theme parks, Disneyland, Universal Studios and Sea World.

Disneyland recently announced a $60 billion investment in its parks to expand and add attractions. 

Walt Disney World and Universal Orlando in Florida experienced reduced attendance and shorter wait times over the summer for a number of reasons, including extreme weather and heat and a tense political atmosphere in the state.

The merger will result in an estimated $200 million in cost savings, according to their projections, with more than half of those coming from administration and operational cost cuts. Forecasts predict it will also generate $3.4 billion in revenue.

Cedar Fair (FUN) shareholders will get one share of stock of the newly combined company for each share owned, and Six Flags (SIX) shareholders will receive 0.58 shares for every share currently owned.