DraftKings Is Acquiring Golden Nugget for $1.56 Billion -- Is DraftKings Stock a Buy?

There's big news in the M&A space after DraftKings (NASDAQ: DKNG) announced a $1.56 billion acquisition of Golden Nugget Online Gaming (NASDAQ: GNOG). The all-stock agreement is expected to close in early 2022, and it seemingly unlocks tremendous value for both businesses. DraftKings, in addition to the acquisition, also announced a commercial agreement with Fertitta Entertainment, the parent company of Golden Nugget, LLC, Landry's LLC, and the Houston Rockets.

Several synergies and strategic benefits were mentioned in the acquisition announcement this morning, which include:

The total expected synergies are estimated to be worth over $300 million at maturity. I think the biggest benefit for DraftKings will be the exposure to brick-and-mortar casinos in Las Vegas, Atlantic City, and elsewhere. DraftKings, combined with Golden Nugget Online Gaming, will be able to compete directly with Penn National Gaming (NASDAQ: PENN), which finalized its $163 million acquisition of Barstool Sports in early 2020. Penn National Gaming owns, or has interest in, 39 gaming-related facilities across the United States, and many DraftKings bears argued that land-based operations were required for its business to reach its full potential in the long term. The announcement today creates two primary powerhouse gaming companies, which I believe will become major sports and entertainment media platforms over the long term.

Source Fool.com