FanDuel and DraftKings merger called off due to suit filed by FTC
FanDuel DraftKings merger called off
The two companies have been in stiff competition for fan dollars, and much scrutiny has been paid to the proposed merger. The US Federal Trade Commission had been reviewing the deal and recently the FTC, plus California and Washington DC attorneys general, filed a suit to block the merger. The companies, if combined, could possibly represent over 90% of the daily fantasy market, according to a story by Reuters.
“FanDuel decided to merge with DraftKings last November, because we believed that this deal would have increased investment in growth and product development thereby benefiting consumers and the greater sports entertainment industry. While our opinion has not changed, we have determined that it is in the best interest of our shareholders, customers, employees, and partners to terminate the merger agreement and move forward as an independent company,” said FanDuel chief executive Nigel Eccles in a statement on the FanDuel website.
Added DraftKings chief executive Jason Robins on his company’s website: “We believe it is in the best interests of our customers, employees, and investors to terminate our agreement to merge with FanDuel and move forward as a separate company. This will allow us to singularly focus on our mission of providing the most innovative and engaging interactive sports experience imaginable, forever changing the way fans connect with teams and athletes worldwide. We appreciate the continued loyalty of our players – it is you who have made this all possible – and we look forward to kicking off what is going to be our best NFL season yet!”
While both companies defended the validity of the merger, the companies didn’t want a long, drawn out, and potentially very expensive battle with the FTC.
The companies have fought hard against each other in the past for market share, and that looks to continue now that the merger is off.
“There is still enormous, untapped market opportunity for FanDuel, and we will continue to execute our strategy to grow our business and further expand the fantasy sports industry. We’d like to thank our partners and customers for their patience, support and continued loyalty over the past several months,” added Eccles in his statement.