Additionally, the three organizations said in a joint news release that they will work cooperatively to allow a process for any LIV Golf players to reapply for PGA Tour and DP World Tour membership following the 2023 season.
"After two years of disruption and distraction, this is a historic day for the game we all know and love," PGA Tour Commissioner Jay Monahan said in a joint news release.
"How did we go from a confrontation to now being partners? We just realized that we were better off together than we were fighting or apart," he told reporters following an "intense" meeting with Tour golfers to discuss details of the deal.
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 the 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.
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 deal announced on Tuesday is a binding framework agreement but the financial terms have not been hashed out yet, a source familiar with the matter said.
Michael Klein & Co will conduct valuation work on LIV's assets and Allen & Co will conduct valuation work on the PGA Tour's assets before the price at which the merger will happen gets determined, the source added.
A mechanism is included in the agreement to resolve any valuation disputes, the source said, without elaborating further.
EXCLUSIVE INVESTOR
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."
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.
The deal could well attract serious antitrust scrutiny. The PGA Tour had sought to fend off competition from LIV by barring PGA Tour players from participating in LIV tournaments.
The Justice Department successfully blocked a merger of two U.S. book publishers last year on the grounds that it would hurt author incomes.
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."
