Emanuel, McMahon Tout Knockout Deal And 'Next Evolution' Of WWE: 'This Is UFC 2.0'

Endeavor Group Holdings Inc EDR has a stronghold on the combat sports world after completing a knockout deal with World Wrestling Entertainment Inc WWE.

Endeavor CEO Ari Emanuel and the longtime face of WWE Vince McMahon discussed their new tag-team partnership Monday morning on CNBC's "Squawk On The Street."

"This is the biggest thing Ari Emanuel and Vince McMahon have ever done ... people will be talking about this for a long time," McMahon said. 

What To Know: Endeavor and the WWE signed an agreement on Monday to form a new company featuring a one-two punch of iconic sports and entertainment brands UFC and WWE.

Endeavor will hold a 51% controlling interest in the combined company, while WWE shareholders will hold a 49% stake in the new entity expected to be valued at more than $21 billion. 

"It's the right time to do the right thing, and it's the next evolution of WWE," McMahon told CNBC. 

As separate brands, the UFC and the WWE were not realizing their full potential, Emanuel said: "Combined, it's rarified air."

Related Link: Endeavor, WWE Agree To Merge - To Form $21B+ Live Sports And Entertainment Powerhouse

The new company will be led by Emanuel. Dana White will continue as president of UFC and Nick Khan, who was WWE CEO, will be president.

McMahon, who was under scrutiny for sexual harassment charges, will join the board as executive chairman.

"I would have body slammed him if he thought he was gonna leave," Emanuel said with a laugh.

The Endeavor CEO told CNBC that he believes the company paid a fair price. He expects to be able to generate significant cost savings for WWE by combining forces. 

When Endeavor bought the UFC everybody thought the company overpaid at $4.2 billion, he said.

"We've tripled the EBITDA in that period of time, and now with this, this is going to be UFC 2.0," Emanuel said. "I think when people look at this business on a combined basis and also look at the remaining assets, for both shareholders, it's incredible."

The UFC and WWE expect to deliver an estimated $50 million to $100 million in annualized cost synergies by leveraging Endeavor's infrastructure. Endeavor also expects to generate significant revenue growth through media rights, ticket sales, event operations and sponsorships and licensing, among other areas.

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EDR, WWE Price Action: At the time of writing, Endeavor shares were down 5.95% following the announcement, while WWE shares were down 5.18%, according to Benzinga Pro.

Photo: felipe bascuñan from Pixabay.