Daily fantasy sports companies abandon project in the face of objections by the FTC
Reports earlier this week that DraftKings and FanDuel were reconsidering their positions regarding a merger following objections from anti-trust regulators were confirmed Thursday when both companies announced that they have decided to abandon the project.
DraftKings issued a press statement advising:
“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, our customers who have made this all possible – and we look forward to kicking off what is going to be our best NFL season yet!”
FanDuel commented:
“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. 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.”
As the two companies go their separate ways, observers at the publication Axios point out that FanDuel will probably resurrect the financing moves it halted pending the merger, whilst DraftKings had already raised additional funds earlier this year.
Axios notes that both the DFS companies are individually valued at around $1.2 billion and retain considerable potential as market leaders (the FTC objection was that between them the merged companies would have controlled 90 percent of the market).
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