Endeavor and WWE complete merger, creating TKO Group Holdings

Endeavor Group completed the merger of its UFC mixed martial arts league with World Wrestling Entertainment on Tuesday.

The two are now part of a new company, TKO Group Holdings, which will begin trading on the New York Stock Exchange on Tuesday under the ticker symbol “TKO.” Make an effort said in a statement The new company reaches audiences in 180 countries and produces more than 350 events.

“Through this combination, TKO will leverage Endeavor’s expertise in areas such as domestic and international media rights, ticket sales and revenue optimization, event operations, global partnerships, licensing and world-class hospitality to drive revenue growth,” the company said in a statement.

The deal valued UFC at $12.1 billion and WWE at $9.3 billion.

“The creation of TKO marks an exciting new chapter for UFC and WWE as leaders in global sports and entertainment,” said Endeavor CEO Ari Emanuel, who also takes the helm at TKO.

“Given their continued connection to the Endeavor network, we are confident that we can accelerate their respective growth and unlock long-term sustainable value for shareholders,” he continued. “With UFC and WWE under one roof, we will deliver unparalleled experiences to more than one billion passionate fans worldwide.”

TKO shares traded at $100.33, 32 cents less than the final closing price of WWE shares on Monday. The market had treated WWE shares as a proxy for the new company’s shares since the deal was announced in April.

Endeavor shares rose 47 cents, or 2.1%, to $22.39 early in the day’s session.

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The merger means WWE will no longer be controlled by the McMahon family for the first time since its founding in 1953. The deal resulted in Endeavor holding a controlling 51% stake in the new company and existing WWE shareholders holding a 49% stake.

However, Vincent McMahon, who built the strong brand from his father’s company but was forced to step down as CEO in 2022 amid revelations of sexual misconduct and the use of hush money payments, will take on a role as chairman of the new company.

“This is the culmination of a decades-long partnership between Endeavor and WWE on strategic initiatives including talent representation and media rights. “Given our collaborative, trusting relationship and Endeavor’s incredible track record of growing UFC, we believe WWE is optimally positioned for future growth and success as part of TKO,” McMahon said in the statement. “Our focus remains on delivering to our fans around the world as we work with UFC and Endeavor to take the business to the next level.”

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Analysts at TD Cowen on Tuesday gave Endeavor stock an Outperform or Buy rating.

According to TheFly.com, the company expressed “a positive view” on the company for the next 12 months and said the market is underestimating the value of Endeavor’s non-TKO assets.

Brian Ashcraft

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