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UFC and WWE to Merge, Creating a $21 Billion Entertainment Giant

World Wrestling Entertainment Inc and mixed martial arts franchise UFC, owned by Endeavor Group, have announced a merger that will create a new entertainment giant valued at approximately $21 billion.

The companies released a statement on Monday confirming the deal, which unites two of the biggest names in wrestling and entertainment. The agreement comes after a lengthy sales process for WWE, which was overseen by co-founder and executive chairman Vince McMahon, who returned to the company's board in January.

The new company will be led by Emanuel, CEO of Endeavor, who will capitalize on Endeavor's expertise in securing media deals, sponsorships, and new forms of distribution to drive growth. McMahon will retain his role in the new company, which will be majority-owned by Endeavor with a 51% stake, while WWE investors will own the remainder.

WWE attracted several potential buyers who put in all-cash bids, but the company favored a tie-up with Endeavor, as an all-stock deal was deemed more attractive due to the potential upside in the share price of the combined entity, according to sources familiar with the matter. However, the complex all-stock structure of the deal surprised investors who were expecting an all-cash transaction, according to analysts.

Shares of WWE closed down 2.1% at $89.30 on Monday, while Endeavor shares closed 5.9% lower at $22.52. John Healy, an analyst at Northcoast Research, commented on the surprise structure of the deal, stating that "maybe the ultimate structure of this was not aligned with their short-term thinking of how it might work." Nevertheless, the merger represents a significant move for both companies, and the new entertainment giant is set to make its mark on the industry.


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