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World Wrestling Entertainment (WWE) and Ultimate Fighting Championship (UFC) will team up to form a new company in a blockbuster deal announced Monday.

Endeavor Group Holdings Inc., which already runs mixed-martial arts promoter UFC, will take a 51 per cent stake in WWE, while existing shareholders of the publicly traded company will retain 49 per cent control.

WWE’s executive chairman Vince McMahon, who made a return to the company in January to lead talks for a sale after stepping down amid sexual misconduct allegations last year, will remain chair of the board at the newly merged company. UFC president Dana White will retain his role, Nick Khan will transition from CEO to president of WWE, and Endeavor CEO Ariel Emanuel will hold the same role in the newly merged company.

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The deal values UFC at US$21.3 billion and WWE at US$9.3 billion. Last year, WWE booked revenue of US$1.3 billion.

Rumours swirled about who would possibly be interested in buying WWE, with chatter focusing on companies such as Endeavor, Disney, Fox, Comcast, Amazon and Saudi Arabia’s Public Investment Fund.

Media industry analysts viewed WWE as an attractive acquisition target given its global reach and loyal fanbase, which includes everyone from minors to seniors and a wide range of incomes.

The deal with UFC comes a day after WWE’s marquee event, WrestleMania, ran over two nights at SoFi Stadium in Los Angeles.

The weekend’s matches included performances from not only WWE mainstays such as Roman Reigns, Rey Mysterio, John Cena and Cody Rhodes, but also mainstream stars including social media influencers Logan Paul and KSI, pop superstars Snoop Dogg and Bad Bunny and San Francisco 49ers tight end George Kittle.

Canadian wrestlers Edge, Sami Zayn and Kevin Owens were also among the top-billed combatants at WrestleMania 39.

A synergy already exists talent wise between WWE and UFC, with stars such as Brock Lesnar and Ronda Rousey crossing over between the two businesses.

Click to play video: 'WWE supertsar Edge makes his return to Toronto'

WWE supertsar Edge makes his return to Toronto

The new company, which does not yet have a name, plans to trade on the New York Stock Exchange under the “TKO” ticker symbol. Its board will have 11 members, with six being appointed by Endeavor and five being appointed by WWE.

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The transaction, which was approved by the boards of Endeavor and WWE, is targeted to close in the second half of the year.

Shares of World Wrestling Entertainment Inc., based in Stamford, Conn., fell six per cent before the opening bell. Shares of Endeavor, based in Beverly Hills, California, rose nearly four per cent.

— with files from Associated Press

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