Ticketmaster is merging with LiveNation in an all-share deal that will give the combined firm a value of USD2.5bn. The ticketing and music promotion companies announced the deal after weeks of talks. The move is likely to attract considerable anti-trust attention before it is completed.
Under the deal, Live Nation will pay Ticketmaster shareholders 1.384 shares of Live Nation stock for each Ticketmaster share. Based on current share prices and outstanding stock, this transaction will be worth an estimated USD418m.
The merged company, called Live Nation Entertainment, will be 50% owned by each partner. Ticketmaster chairman Barry Diller will lead the firm as chairman of the board. Live Nation CEO Michael Rapino will act as CEO and president of the new company, while Irving Azoff, Ticketmaster's current CEO, becomes executive chairman.
The deal will establish an entertainment powerhouse, covering everything from ticket sales, promotion, recorded music and merchandising. Over the last year, Live Nation signed a string of high profile '360 degree' record deals with acts including Jay-Z and Nickelback.
LiveNation and Ticketmaster argue the merger will benefit concert-goers by giving better access to tickets and helping to fill empty seats by promoting events to fans. The firms also say they will increase R&D investment in ticketing technologies.
"The current inefficiencies in the system result in higher costs and confusion over access to seats." says Rapino. "Together, we will work to simplify the ticketing process and ultimately increase attendance at live events."
However, commentators argue that the combined firm will become a dominant force in the ticket and promotion market, stifling competition.
"This merger would give a giant new entity unrivalled power over concert-goers and the prices they pay to see their favourite artists and bands," says Democratic senator, Charles Schumer, who called on the Justice Department and Federal Trade Commission (FTC) to carefully scrutinise the deal.
Some analysts suggest that for the deal to be approved, Live Nation will be asked to spin-off its ticketing arm. This was established over the last two years, in anticipation of the end of its ticket deal with Ticketmaster. The firms have worked together for 10 years.
Subject to shareholder approval of the deal, the FTC will have 30 days to decide whether to investigate the merger.
StrategyEye's related categories: Payment - Mobile Payment General
StrategyEye's related companies: Ticketmaster, LiveNation
