Endeavor and WWE Close Merger, Create TKO Group Holdings
Endeavor Group completed the combination 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, that will trade on the New York Stock Exchange under the ticker “TKO” starting Tuesday. Endeavor said in a statement the new company reaches viewers in 180 countries and produces more than 350 events.
“Through this combination, TKO will leverage Endeavor’s expertise in areas including domestic and international media rights, ticket sales and yield optimization, event operations, global partnerships, licensing, and premium 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 is also taking the helm at TKO.
“Given their continued connectivity to the Endeavor network, we are confident in our ability to accelerate their respective growth and unlock long-term sustainable value for shareholders,” he continued. “With UFC and WWE under one roof, we will provide unrivaled experiences for more than a billion passionate fans worldwide.”
TKO shares were trading at $100.33, down 32 cents from the final closing price of WWE stock on Monday. The market had treated WWE shares as a proxy for the new company’s stock since the deal was announced in April.
Endeavor shares gained 47 cents, or 2.1%, to $22.39 as the day’s session began.
The combination means that for the first time since it was founded in 1953 that WWE is no longer controlled by the McMahon family. The deal resulted in Endeavor holding a 51% controlling interest in the new company and existing WWE shareholders holding a 49% interest.
However, Vincent McMahon, who built the powerhouse brand from his father’s company but was forced to step down as CEO in 2022 following the expose of sexual misconduct and use of hush money payments, will have a role as chairman of the new company’s board.
“This is the culmination of a decades-long partnership between Endeavor and WWE across strategic initiatives including talent representation and media rights. Given our collaborative, trusted relationship and Endeavor’s incredible track record of success 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 for our fans across the globe as we take the business to the next level alongside UFC and Endeavor.”
TD Cowen analysts stated coverage of Endeavor stock Tuesday at “Outperform,” or “Buy.”
The firm expressed “a favorable view” on the company for the next twelve months, and said the market is underappreciating the value of Endeavor’s non-TKO assets, according to TheFly.com.
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