Joint rulers of this daily fantasy recreations (DFS) market DraftKings and FanDuel have actually walked away from a proposed merger of equals, less than the usual month after the Federal Trade Commission (FTC) moved to block the deal on grounds of antitrust ‘fair competition’ issues.
The deal’s off: DraftKing’s Jason Robins (left) and FanDuel’s Nigel Eccles announced on Thursday that their companies would be going it alone, calling off a potential FTC fight regarding the grounds of antitrust violations. (Image: Reuters)
The two companies announced the termination of the tie-up on Thursday, just days after that they had each filed legal briefs to a federal district court, vigorously defending the merger.
But with both companies already fighting lawsuits on several fronts, it appeared to be another expensive and possibly condemned battle that is legal ahead. A source told ESPN that taking on the FTC would likely cost some $12 to $15 million.
Ironically, consolidation might have dramatically cut the amount of appropriate and lobbying costs the two businesses invest fighting for legal DFS in states across the usa. It would also take away the expenses associated with attempting to out-market the other person.
The failure of the deal leaves both in precarious positions that are financial as neither has ever been profitable. Papers related to the merger leaked final month revealed that DraftKing Continue reading