Dubai World in $5bn casino deal

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State-run Dubai World is set to pay $5bn (£2.5bn) for a 9.5% share of casino firm MGM Mirage, as well as half the City Center hotels.

As part of the deal the firm will pay $2.7bn for a stake in the CityCenter project, a Las Vegas hotel and shop development scheduled for 2009.

MGM Mirage's majority shareholder - investment firm Tracinda - abandoned an earlier bid for CityCenter.

Dubai World has been expanding overseas, in hotels among other areas.

Overseas expansion

The CityCenter project is a 76 acre development in Las Vegas, scheduled to open in 2009.

As part of the Dubai World deal, it is also expected to buy 14 million shares from MGM Mirage for about $1.2bn - or $84 for each share.

That price represents a premium of 13% over Tuesday's closing price on the New York Stock exchange.

When Tracinda boss Kirk Kerkorian made his initial offer in May for CityCenter, the bid pushed up shares in MGM by 18%.

Dubai World's overseas expansion has included buying British firm P&O.

Meanwhile the firm's private equity business Istithmar has already invested in several hotels including the Mandarin Oriental in New York and the Knickerbocker hotel in New York.