Joint rulers of the day-to-day fantasy activities (DFS) market DraftKings and FanDuel have walked away from a proposed merger of equals, less than a month after the Federal Trade Commission (FTC) moved to block the deal on grounds of antitrust ‘fair competition’ dilemmas.
The offer’s off: DraftKing’s Jason Robins (left) and FanDuel’s Nigel Eccles announced on Thursday that their companies would be going it alone, calling down a possible FTC fight regarding the grounds of antitrust violations. (Image: Reuters)
The two companies announced the termination of the tie-up on Thursday, simply days after they’d each filed appropriate briefs to a federal district court, vigorously protecting the merger.
But with both companies already fighting legal actions on several fronts, it looked like another expensive and possibly condemned battle that is legal ahead. A source told ESPN that dealing with the FTC would likely cost some $12 to $15 million.
Ironically, consolidation would have dramatically cut the amount of appropriate and costs that are lobbying two businesses invest fighting for legal DFS in states across the US. It might also take away the costs associated with trying to out-market each other.
The failure of the deal leaves both in precarious positions that are financial as neither has ever been profitable. Documents related to the merger leaked final thirty days revealed that DraftKings has lost a staggering $688 million over the span of its four-year existence. Final November, fleetingly before the offer was established, the New York Post reported that both companies were behind in re payments to suppliers, solicitors, and lobbyists.
Both companies were putting a face that is brave it inside their formal statements on Thursday afternoon.
‘We still find it in the best passions of our clients, employees, and investors to terminate our contract to merge with FanDuel and go forward as a company that is separate’said DraftKings CEO Jason Robins.
FanDuel CEO Nigel Eccles said his company had made a decision to merge with DraftKings because he thought the deal would have ‘increased investment in growth and item development consumers that are thereby benefiting the greater sports entertainment industry.
‘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 dream sports industry,’ he included.
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