The PGA Tour ended its expensive fight with Saudi Arabia’s golf venture and now is joining forces with it, announcing on Tuesday a merger that creates a commercial operation with the Public Investment Fund and the European tour.

As part of the deal, the sides immediately are dropping all lawsuits involving LIV Golf.

From the golf side, still to be determined is how players like Brooks Koepka and Dustin Johnson can rejoin the PGA Tour after defecting last year for signing bonuses reported to be in the $150 million range.

From the commercial side, the governor of Saudi Arabia’s sovereign wealth fund joins the PGA Tour board of directors and leads the new venture as chairman, though the PGA Tour will have a majority stake.

The announcement comes a year after LIV Golf began. The PGA Tour commissioner, Jay Monahan, was at the Canadian Open that week and said pointedly about any player who joined LIV or was thinking about it: “Have you ever had to apologize for being a member of the PGA Tour?”

Now they are partners, giving Saudi Arabia a commercial voice in golf’s premier organization.

“They were going down their path, we were going down ours, and after a lot of introspection you realize all this tension in the game is not a good thing,” Mr. Monahan said in a phone interview with the Associated Press.

“We have a responsibility to our tour and to the game, and we felt like the time was right to have that conversation.”

Mr. Monahan was headed to Toronto to meet with players. And while this likely will only lead to greater riches in golf, there still was explaining to do on why the tour would merge with a group that tried to take away some of the PGA Tour’s best players and was seen as the latest example of “sportswashing.”

“I understand the criticism,” Mr. Monahan said. “For me, you take the information you have at the time and make decisions in the best interests. Things have changed. This was the right time to have this conversation.”

Players were furious to learn of the merger on social media. Wesley Bryan tweeted, “I feel betrayed, and will not not be able to trust anyone within the corporate structure of the PGA Tour for a very long time.”

One news outlet broke an embargo of the announcement about 30 minutes early and before some players were able to read Mr. Monahan’s memo to them.

The agreement combines the Public Investment Fund’s golf-related commercial businesses and rights — including LIV Golf — with those of the PGA and European tours. The new entity has not been named.

The governor of Saudi Arabia’s sovereign wealth fund, Yasir Al-Rumayyan, will join the board of the PGA Tour, which continues to operate its tournaments. The PIF will invest in the commercial venture.

“From the very beginning, the whole initiative was how to grow the game of golf,” Mr. Al-Rumayyan said. “And I think what was achieved today was exactly that.”

As for the new role of Greg Norman, Mr. Al-Rumayyan said only that he is LIV Golf’s commissioner and details of his future role would be announced in the coming weeks.

Mr. Monahan’s memo to players indicated a strong Saudi Arabian presence. He said PIF would make a financial investment to become a “premier corporate sponsor” of the PGA Tour, the European tour, and other international tours.

Mr. Monahan said the merger came together in the last seven weeks, with a PGA Tour board member, Jimmy Dunne, responsible for bringing together Messrs. Monahan and Al-Rumayyan. Mr. Dunne and the chairman of the PGA Tour’s board, Ed Herlihy, will serve on the board of the commercial venture.

Phil Mickelson and Bryson DeChambeau were among 11 players who filed an antitrust lawsuit against the PGA Tour last August. LIV joined as plaintiffs, and the PGA Tour countersued.

The concern for PIF was whether its leaders could be deposed, which Saudi Arabia wanted to avoid. A federal judge had ruled the PIF could not claim immunity from the Foreign Service Immunity Act because of its commercial work with LIV Golf in the U.S.

The PIF appealed the ruling to the Ninth U.S. Circuit Court of Appeals, which was likely to extend the lawsuit deep into 2024 if not longer.

Associated Press