The $4.05bn (£3bn/€3.4bn) merger between Viagogo and StubHub looks set to be approved after a preliminary deal was reached with the UK competition watchdog.
The Competition and Markets Authority (CMA) on Monday confirmed it “proposes to accept” a series of promises from the companies, which would include selling off all of StubHub’s business outside North America.
The CMA said last month that Viagogo must sell StubHub’s international arm to satisfy the regulator’s concerns surrounding the merger, which was paused in December 2019 due to regulatory scrutiny.
A Phase 2 probe by the regulator found concerns that the transaction could lead to increases in fees for customers, including fans, who resell or buy secondary tickets to live events.
The potential CMA approval would clear a path for the ticket resellers and allow the two companies to start joining forces. Merger rules prevent firms from integrating while the regulator reviews takeovers using an interim order.
The preliminary deal requires the firms to provide the CMA with a shortlist of potential purchasers of the StubHub International Business within six weeks from the deal being accepted by the CMA.
It also states that Viagogo must secure the appointment or retention of an independent monitoring trustee, approved by the CMA, to ensure compliance with the terms of the deal.
Although Viagogo actually suggested selling off StubHub’s non-North American business in November as a possible solution to the impasse, the CMA has insisted on imposing a number of other measures that were not part of the proposal.
The CMA will determine key conditions of the sale of the non-North American business, such as the right of the purchaser to use the StubHub brand for the next 10 years. In November, Viagogo proposed that the buyer would be allowed to use the StubHub UK brand for only three years. The watchdog will also approve the buyer before the sale proceeds.
Following an earlier investigation, the regulator outlined how the combined businesses would have a market share of more than 90 per cent in the UK without intervention and also looked at whether other distribution channels – capped-price ticket exchanges, classified advertising sites, social media and the primary ticketing market – would be able to compete strongly with the merged entity.
The CMA said that none of the other channels would be able to stop the merged business from pushing up fees or reducing the quality of service.
TheTicketingBusiness has contacted Viagogo and StubHub for comment.