DraftKings and FanDuel give up on merger
CEOs of both companies announced that they abandoned the plans to merge their business.
US.- The biggest daily fantasy sports (DFS) companies from the United States, DraftKings and FanDuel, reported that the attempts to merge their business were dropped, as they believe that staying independent is in their best interest.
Nigel Eccles, CEO of FanDuel, released a statement early on Thursday where he said: “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.” CEO of DraftKings, Jason Robbins, released a similar statement where he said that by dropping the attempts to merge, DraftKings can singularly focus on its mission of providing the most innovative, and engaging interactive sports experience imaginable. “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,” he added.
The Federal Trade Commission (FTC) announced the authorisation of legal action to block the project of the two DFS giants late last month because it was believed that the merger attempted against a free market, as the combined firms would’ve controlled more than 90 percent of the US market for paid daily fantasy sports contests, the FTC said. Moreover, the commission also complained that the proposed merger was in violation of the Section 7 of the Clayton Act and Section 5 of the FTC Act. Tad Lipsky, Acting Director of the FTC’s Bureau of Competition, had said that the merger would’ve deprived customers of the substantial benefits of direct competition between both companies.
The FTC later received responses from both companies, where they said that the merger would’ve helped the market since it would’ve resulted in substantial merger-specific efficiencies, cost-savings, innovation, and other pro competitive effects that would directly increase the consumer value proposition.
Whilst Eccles insisted this week on the fact that the company’s views on the subject haven’t changed since it first tried to reach a fusion, he’s convinced that there’s still a big, untapped market opportunity for FanDuel, and that they will continue to execute their strategy to grow business and further expand the fantasy sports industry. The CEO also suggested that 2018 is set to be FanDuel’s “break-even year.”
