Motivated by the existence of candidates for exotic hadrons whose masses are close to both of two-body and three-body hadronic thresholds lying close to each other, we study degenerate two-body and three-body coupled-channel systems. We first formulate the scattering problem of non-degenerate two-body and three-body coupled-channels as an effective three-body problem, i.e. effective Alt-Grassberger-Sandhas (AGS) equations. We next investigate the behavior of S-matrix poles near the threshold when two-body and three-body thresholds are degenerate. We solve the eigenvalue equations of the kernel of AGS equations instead of AGS equations themselves to obtain the S-matrix pole energy. We then face a problem of unphysical singularity: though the physical transition amplitudes have physical singularities only, the kernel of AGS equations have unphysical singularities. We show, however, that these unphysical singularities can be removed by appropriate reorganization of the scattering equations and mass renormalization. The behavior of S-matrix poles near the degenerate threshold is found to be universal in the sense that the complex pole energy, E, is determined by a real parameter, c, as c + E log (−E) = 0, or equivalently, Im E = πRe E/ log (Re E). This behavior is different from that of either two-body or three-body system and is characteristic in the degenerate two-body and three-body coupled-channel system. We expect that this new class of universal behavior might play a key role in understanding exotic hadrons.