The transaction is expected to close in the first half of 2020 and Diamond Eagle intends to change its name to DraftKings Inc., reincorporate in Nevada and remain Nasdaq-listed under a new ticker symbol.
Institutional investors have committed to a private investment of $304 million in Class A common stock of the combined company.
These investors include funds managed by Capital Research and Management Company, Wellington Management Company and Franklin Templeton.
It is anticipated the combined company will have a market capitalisation of approximately $3.3 billion and have over $500 million of unrestricted cash on the balance sheet.
DraftKings CEO Jason Robins said: "The combination of DraftKings’ leading and trusted brand, deep focus on customer experience and data science expertise and SBTech’s highly innovative and proven technology platform creates a vertically-integrated powerhouse.
"I look forward to building significantly upon our goals of continuing our state-by-state rollout and creating the most entertaining and engaging customer experiences for sports fans globally."
The new DraftKings will continue to be led by Co-founder and CEO Robins and will retain DraftKings’ management team, including co-founders Paul Liberman and Matt Kalish.
Gavin Isaacs, SBTech Chairman, said: "The combination of DraftKings and SBTech brings together two tech-native companies with the customer at their cores.
"SBTech will maintain its core business and continue its B2B focus. We are excited about the opportunity to join a company with a similar innovation DNA and create a unique and differentiated player in global sports betting and online gaming."
Reports first surfaced of DraftKings' interest in acquiring SBTech in June, while Diamond Eagle's interest in collaborating with DraftKings was rumoured in October.
