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The deal brings together two of the biggest names in wrestling and entertainment and caps off a months-long sales process for WWE.
World Wrestling Entertainment (WWE) and Ultimate Fighting Championship (UFC) announced they are merging to create a $21.4 billion sports entertainment powerhouse.
A new public company will own the UFC and WWE brands, with Endeavor Group Holdings Inc (owner of UFC) holding a 51% controlling interest in the new company.
Existing WWE shareholders will receive 49 percent of the shares.
The deal unites two of the biggest names in wrestling and entertainment and caps a months-long sales process for WWE overseen by its co-founder and executive chairman Vince McMahon, who Returned to the company’s board of directors in January.
McMahon will continue to serve in the new company, which has not yet been named.
The companies value UFC at $12.1 billion and WWE at $9.3 billion.
“This is a once-in-a-lifetime opportunity to bring together two leading pure-play sports and entertainment companies,” Endeavor CEO Ari Emanuel said in an investor presentation, describing the deal as a “transformative step” for Endeavor.
Emanuel said he will serve as CEO while continuing his role at Endeavor.
today, @effort Announces that it has signed an agreement to form a global live sports and entertainment company with a market capitalization in excess of $2.1 billion, consisting of the following companies @UFC and @WWE. https://t.co/lPrkBmKJXm pic.twitter.com/ZBk95c5exU
– Endeavor (@Endeavor) April 3, 2023
Shares of WWE were down 4.5 percent in premarket trading, while shares of Endeavor rose 4 percent.
The new company will be listed on the New York Stock Exchange under the ticker symbol “TKO,” the companies said.
Hollywood power broker Emanuel has transformed Endeavor, which had its roots in representing film and TV talent, into a sports and entertainment powerhouse through more than 20 acquisitions.
He has invested in bull rides, fashion shows and tennis tournaments at the Miami Open and Madrid Open.
Endeavor said it would use the same strategy as the UFC, the world’s largest martial arts organization, to improve operational efficiency, negotiate lucrative media deals and strike licensing deals.
Since 2017, a year after Endeavor took a controlling stake in the company, UFC revenue has more than doubled and a half and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) has doubled. Endeavor buys out remaining shareholders in 2021.
The UFC and WWE will also provide cash to the new company, so it’s holding close to $150 million, according to a deal that one source says is internally known as Project Stunner.
The agreement values ​​WWE at $106 per share, a 16 percent premium to the company’s closing price on Friday, giving WWE an enterprise value of $9.3 billion.
In January, WWE said it would explore strategic options that could include a sale shortly after McMahon returned to the company.
McMahon retired as the company’s chief executive and chairman last July following an investigation into alleged misconduct. Co-CEO Stephanie McMahon, who ran the company on her own after her father left, resigned a week after returning in January.
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