Additionally, the organizations said in a joint news release they will work together to allow a process for LIV Golf players to reapply for membership on the PGA Tour and DP World Tour, formerly known as the European Tour, following the 2023 season.
The bombshell announcement was slammed by many PGA Tour players who were seemingly left in the dark about the merger and comes after a very public war of words between all the sides, mounting tensions and a bitter legal battle.
"After two years of disruption and distraction, this is a historic day for the game we all know and love," said PGA Tour Commissioner Jay Monahan.
No details were given as to how the agreement will impact the current competitive golf landscape, including eligibility for this year's Ryder Cup, though the parties did say they will work in the coming months to finalise terms of the merger.
The LIV Golf series is bankrolled by the Saudi Arabia Public Investment Fund and critics have accused it of being a vehicle for the country to attempt to improve its reputation in the face of criticism of its human rights record.
Much of the backlash centres around the alleged involvement of the Saudi Arabian government in a multitude of human rights violations, including the murder of Washington Post journalist Jamal Khashoggi in 2018.
The announcement of the merger includes an agreement to end all pending litigation between the participating parties.
Additionally, the Public Investment Fund will make a capital investment into the new entity to facilitate its growth and success.
"Today is a very exciting day for this special game and the people it touches around the world," said PIF Governor Yasir Al-Rumayyan. "We are proud to partner with the PGA Tour to leverage PIF's unparalleled success and track record of unlocking value and bringing innovation and global best practices to business and sectors worldwide."
'GREAT CREDIT'
The rival LIV Golf circuit, which features 54-hole events with no cuts instead of the traditional 72-hole format, launched in 2022 and lured big-name players away from the rival circuits with staggering sums of prize money for every golfer.
The PIF will initially be the exclusive investor in the new entity and the board of directors will include Al-Rumayyan as Chairman and the PGA Tour's Monahan as CEO.
After years of acrimony the deal seems to have come together quickly with little fuss and no leaks – despite it being one of the biggest commercial stories in the history of sport.
Al-Rumayyan told CNBC that he and Monahan met in London.
"We had a lunch followed by the next day a round of golf and then another lunch. We had discussions and we covered everything. I think it will be a matter of weeks (for a definitive agreement to be settled)."
Monahan added: "I give Yasir, great credit for coming to the table, coming to discussions with an open heart and an open mind. We did the same and the game of golf is better for what we've done here today."
The PGA Tour confirmed in July 2022 that the US Justice Department was investigating whether it broke antitrust law in fighting off the rival LIV Golf circuit. Read full story
The PGA had sought to fend off the competition by barring its players from participating in the breakaway LIV circuit.
That said, one antitrust expert said that the PGA/LIV deal would be approved and two others said it was too close to call.
"This is entertainment. I think that would make it a less priority for the antitrust enforcers," said Seth Bloom of Bloom Strategic Counsel.
'AWESOME DAY'
Among the more popular players who made the move to LIV Golf are Hall of Fame golfer Phil Mickelson, former world number one Dustin Johnson, reigning PGA Championship winner Brooks Koepka and 2022 British Open winner Cameron Smith.
"Awesome day today," tweeted Mickelson, whose public image took a hit in February 2022 when the author of an unauthorised biography on him released excerpts from the book in which he called the Saudis "scary" but said he was willing to look past their human rights records to gain leverage with the PGA Tour.
Some PGA Tour players took to Twitter to express their surprise having not been informed of the agreement before its announcement.
"I love finding out morning news on Twitter," wrote two-times major champion Collin Morikawa.
Canadian world number 67 Mackenzie Hughes wrote: "Nothing like finding out through Twitter that we're merging with a tour that we said we'd never do that with."
Former US President Donald Trump, who owns three courses that are part of LIV Golf's 14-event schedule in 2023, celebrated the deal in a Truth social post using all caps.
"Great news from LIV Golf. A big, beautiful, and glamorous deal for the wonderful world of golf. Congrats to all!!!"
Since its launch, LIV players have only competed alongside their former colleagues at the majors as those four blue-riband events on the golf calendar are not run by either the PGA Tour or DP World Tour but by independent institutions.
Many of those who accepted lucrative signing bonuses to join LIV Golf cited as their reason for making the leap a desire to play fewer events and spend more time with their families.
