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American fantasy sports contest, and sports betting operator DraftKings Inc. has reportedly agreed to acquire Golden Nugget Online Gaming through an all-stock deal valued at USD 1.56 billion.
A new holding company going by the name ‘New DraftKings’ will be formed under the proposed transaction, and Golden Nugget shareholders will be entitled to receive a fixed ratio of 0.365 shares in the new company.
The deal, which is expected to be finalized by the first quarter of 2022, is currently contingent on Golden Nugget Online Gaming shareholders’ approval but has been accepted by the Board of Directors from both companies.
Notably, the market reacted favorably to the initial announcement, with DraftKings shares rising over 3% and Golden Nugget Online Gaming stock surging by nearly 50% in premarket trading.
With this acquisition, DraftKings, which owns a considerable share of the U.S. sports betting and fantasy sports market, seeks to expand its reach into the iGaming sphere.
According to a statement given by DraftKings, online casino games have been highly profitable for iGaming entities, and the company will now be able to leverage Golden Nugget’s sought-after brand name, iGaming experience, and its existing database consisting of over 5 million customers.
DraftKings CEO, Jason Robins was quoted saying that the deal will give rise to meaningful synergies in the form of high combined company revenues triggered by greater cross-sell opportunities, tech-driven product expansion, and loyalty integrations.
Meanwhile, Tilman Fertitta, who is a 46% equity shareholder in Golden Nugget Online Gaming, has agreed to continue holding the newly issued DraftKings merger shares for at least a year from the closing of the deal. He will also be appointed as one of the Board of Directors at DraftKings.
In related news, industry rival Penn National Gaming purchased Canadian sports app Score Media and Gaming, for USD 2 billion last week.
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