W WWE, UFC to merge in $21 billion deal

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W WWE, UFC to merge in $21 billion deal

It's official: WWE WWE and UFC EDR will be under one roof: TKO.

WWE and Endeavor announced on Monday that they would combine in a deal valuing both companies at more than $21 billion. WWE is valued at $9.3 billion, a more than 33% premium to the company's market cap on Friday, while UFC owner Endeavor is valued at $12.1 billion.

The combined company will be run by Enedeavor CEO Ari Emanuel while WWE's majority owner and executive chairman Vince McMahon will take over the executive chairmanship. UFC president Dana White and WWE's Nick Khan will be the president of the wrestling brand.

This is a rare opportunity to create a global live sports and entertainment pureplay built for where the industry is headed, Emanuel said in a statement. Vince and his team have demonstrated a strong track record of innovation and shareholder value creation over the past decade, and we are confident that Endeavor can deliver significant additional value for shareholders by bringing UFC and WWE together. I believe that this is the best outcome for shareholders and other stakeholders because of the incredible work that Ari and Endeavor have done to grow the UFC brand over the past seven years and the immense success we have already had in partnering with their team on a number of ventures.

The company said deal synergies between $50 million and $100 million are most likely to be caused by back office consolidation. The shares of WWE fell 4% on the news, while Endeavor's shares rose 7%.

On Sunday night, veteran analyst Steve Cahall, of Wells Fargo, said he doesn't expect a counter-bid for WWE to emerge and considered the proposed deal solid for WWE.

The premium is solid, Cahall stated, and if McMahon is on board then it's done, as WWE is a controlled company and McMahon would need a hefty premium for a cash deal. We would view a deal with Endeavor favorably for WWE. Cahall said that the combined entity would have to impress Wall Street with synergy potentials in order to win over investors.

EDR expects to bring in cost reduction or rights revenues by leveraging the combined scale in live sports entertainment, according to Cahall. Synergies and rights deals are likely to be influenced by the 2025 -- 26 pro-forma NewCo EBITDA expectations. There is future risk to WWE shares if the outlook doesn't impress. Sozzi follows BrianSozzi on Twitter and LinkedIn. Email brian.sozzi yahoofinance.com