LONDON - The proposed merger of two live music giants, Live Nation Inc (LYV.N) and Ticketmaster Inc (TKTM.O), was given a huge boost on Tuesday when a British regulatory body dropped its objections and approved the deal.
Britain's Competition Commission had said in October it was concerned about the move to combine the world's largest concert promoter with the leading ticketing group, saying fans could wind up paying more to see their favorite artists.
The provisional ruling hit the share prices of both companies at the time and fueled expectations that a deal frequently criticized by artists, fans and politicians could be scuppered.
But in a shot in the arm for the firms' hopes of gaining regulatory clearance in the United States and Canada, the British body on Tuesday reversed its earlier position.
The Commission said it now believed the new entity would not have the incentive to hurt rivals, and it was satisfied the deal would not damage an existing partner of Live Nation's -- CTS Eventim AG (EVDG.DE).
It concluded the merger will not result in a substantial lessening of competition in the market for live music ticket retailing or in any other market in the UK, including live music promotion and live music venues.
Ticketmaster makes much of its money by taking a fee for selling and marketing tickets for a host of live events including music, sports and the arts.
Shares in CTS Eventim, which gave no immediate comment on the ruling, were trading down 3 percent in Frankfurt at 5:04 a.m. EST in a broadly higher overall market.
U-TURN UNUSUAL, NOT UNIQUE
Live Nation announced plans to buy Ticketmaster Entertainment for about $400 million in stock in February, drawing almost immediate criticism from some U.S. politicians and artists who felt the combined group would have unrivalled power over music fans and the prices they would have to pay.
The UK Commission, which described its decision to reverse its earlier position as unusual but not unique, said it had looked into whether the combined group would try to harm competitors, for example by restricting the sale of tickets to other rivals.
We found that, in most of these cases, the merged entity would suffer significant and immediate losses, with very uncertain prospects for long-term gain, it said.
Therefore, we concluded that it was unlikely that the merged entity would harm other ticketing agencies, promoters and venues in these ways.
The two groups said they remained optimistic there would be a similarly successful outcome in the U.S. and Canada. The deal has already been given regulatory approval in Norway and Turkey.
Today's clearance is an important milestone in the regulatory review process, and brings the companies a step closer to creating a new kind of live entertainment business, Chris Edmonds, Managing Director of Ticketmaster UK, said in a statement.
Paul Latham, the chief operating officer and head of UK operations for Live Nation, said the two groups had worked hard to reassure fans, artists and other parties that by merging they would deliver a better live music experience for the sector.
(Reporting by Kate Holton; editing by John Stonestreet)