On Friday morning, it was announced that FanDuel and DraftKings have reached an official merger agreement, combining the two companies into one. The merger had been rumored to be in the works for some time and over the past few weeks, talk had become more frequent that the two were ready to come together. The financial terms of the deal to merge have not been made available to the public.
A press release was provided by FanDuel and DraftKings on the subject of the merger but did not provide many details. We do know that Jason Robins, the CEO of DraftKings, will become the CEO of the new company as the two combine. Nigel Eccles, the CEO of FanDuel, will be named the chairman of the board for the new company. The board will consist of Eccles and Robins as well as three directors from both FanDuel and DraftKings. There will also be one independent director. Co-headquarters will exist in Boston and New York.
With the merger, the two companies will no longer be in competition within the daily fantasy sports industry. Many are wondering after years of speculation that the two would join together, why now? It could be that the best chance for the companies in the DFS industry was to join forces, pulling together resources and users to create one massive company.
Over time, both companies have spent a ton of cash trying to outdo the other when if they had been combined, the money could be spent elsewhere. The two can work together as a single unit to be more effective in the DFS market.
Even though the announcement of the merger was made now, it will not actually happen until the second half of next year, based on the information found in the press release. The two companies coming together as one is subject to closing conditions of the companies with the logistics of the merger, such as how they will operate moving forward still to be considered.
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