FanDuel and DraftKings are officially scrapping their merger, all thanks to the U.S. government.
Is there anything Donald Trump hasn’t ruined?
All kidding aside, the reasoning is pretty valid, as it threatened competition and was at risk of becoming a monopoly. Basically the Federal Trade Commission determined they would have 90% of the market once combined.
According to Recode:
In a statement, FanDuel CEO Nigel Eccles said the companies believed — even until the end — that the merger would have aided both companies’ growth. But he stressed that it was “in the best interest of our shareholders, customers, employees, and partners to terminate the merger agreement and move forward as an independent company.”
DraftKings, meanwhile, confirmed its decision to drop the deal, while touting its future prospects. “We have a growing customer base of nearly 8 million, our revenue is growing over 30 percent year-over-year, and we are only just beginning to take our product overseas to the billions of international sports fans we have yet to even reach,” said its chief executive, Jason Robbins, in a statement.
I wonder how these two companies will survive the next couple of years, as their original reason for combining their efforts was to help with the financial problems of both companies.