WWE and the company that runs Ultimate Fighting Championship will combine to create a $21.4bn sports entertainment company.

A new publicly traded company will be formed that encompasses the UFC and WWE brands, with Endeavor Group Holdings Inc – the current owner of the UFC – taking a 51% controlling interest in the new company. Existing WWE shareholders will hold a 49% stake.

The companies put the enterprise value of UFC at $12.1bn and WWE at $9.3bn.

The new business will be lead by Endeavor CEO Ari Emanuel. Vince McMahon, executive chairman at WWE, will serve in the same role at the new company.

The announcement comes after McMahon, the founder and majority shareholder of WWE, returned to the company in January and said that it could be up for sale.

Rumors 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.

Industry experts had viewed WWE as an attractive acquisition target given its global reach and loyal fan base, which has a wide range of demographics and incomes.

The company held its marquee event, WrestleMania, over the weekend. Last year, WWE booked revenue of $1.3bn.

The company is also a social media powerhouse. It surpassed 16bn social video views in the final quarter of last year. It has nearly 94m YouTube subscribers and has more than 20 million followers on TikTok. Its female wrestlers comprise five out of the top 15 most-followed female athletes in the world across Facebook, Twitter and Instagram, led by Ronda Rousey with 36.1m followers.

WWE had more than 7.5bn digital and social media views in January and February of this year, up 15% from the same time frame a year ago.

Shares of World Wrestling Entertainment Inc, based in Stamford, Connecticut, slumped 4% before the opening bell on Monday. Shares of Endeavor, based in California, rose 3%.