Live Nation and Ticketmaster, the largest companies in live music, have agreed to merge and begun a defence against antitrust concerns raised by lawmakers and consumer groups.
Shareholders in each company will own about half the equity in the new one, which will have an enterprise value of about $2.5 billion.
The new Live Nation Entertainment will have almost $6 billion in annual sales. Concerns over the power of the combined company arose before the deal was announced.
Ticketmaster owns the world’s largest ticket-selling network and the biggest artist-management firm.
Live Nation is the largest concert promoter, owns the most venues and has exclusive deals with Madonna, U2 and Jay-Z.
“It’s going to get a thorough review,” said Marc Schildkraut, an attorney with Howrey LLP in Washington who was previously assistant director of the Federal Trade Commission’s competition bureau.
“You have a firm that has a very large share of the ticket-selling market and they are acquiring a challenger.”
Ticketmaster chairman Barry Diller, who will hold that title at the new company, defended the merger, saying it won’t lead to higher ticket prices.
Mr Diller said he’s been working to combine the companies “for many years”.
“Ticketmaster does not set prices, Live Nation does not set prices. Artists set the prices,” Mr Diller said on a conference call. “Everyone else is just a distributor or a service provider.
West Hollywood, California-based Ticketmaster will receive 1.384 shares of Live Nation for each of their shares.
Based on yesterday’s closing prices, that represents a premium of 11 per cent for Ticketmaster holders. The new company is pitching itself as an all-in-one link between artists and the venues where fans see them.
Bloomberg