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WWE and Endeavor-owned to merge into a $21bn entertainment giant

World Wrestling Entertainment Inc (WWE) and Endeavor Goup’s mixed material arts franchise UFC are set to merge into a new entertainment giant, which will be publicly listed and valued at around $21bn. Endeavor will own 51% shares of the newly combined company, while WWE shareholders will have the remaining 49%. The deal values WWE at $9.3bn and UFC at $12.1bn.

The deal would pair two of the largest sports entertainment brands in the world. Despite notable differences - WWE features scripted matches and soap opera-like storylines, while UFC showcases actual and intense mixed material arts battles - both organisations share similarities in terms of content and culture. Various UFC fighters, such as Ronda Rousey and Crock Lesnar, have previously competed in wrestling matches for WWE. Together, WWE and UFC will have a vast global presence, significant scale, and omnichannel distribution. As of the 2022 fiscal year-end, the two companies generated a total revenue of $2.4bn and maintained a 10% annual revenue growth rate since 2019.

Ari Emanuel will act as the CEO of both Endeavor and the new company. McMahon and Mark Shapiro will also be the President and COO of both Nedeavor and the new company. Emanuel has expressed his plan to leverage Endeavor’s proficiency in securing media contracts, sponsorships, and innovative distribution methods to stimulate growth in the newly-formed company.

In January, WWE established a strategic review and attracted numerous potential all-cash bids, but the company favored a merger with Endeavor. According to insiders, an all-stock deal was more attractive as it had the potential to increase the combined entity’s stock price when publicly listed. On Monday, April 3, WWE’s shares closed at $89.30, down 2.1% while Endeavor’s shares closed at $22.52, down 5.9%. Analysts said that this is due to the unexpected all-stock deal structure for investors who had anticipated an all-cash transaction.

Written by: Quynh Chi (Camila) Le

Sources: CNBC, Reuters

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