It’s official—and really expensive. Live Nation and Ticketmaster announced this morning that they will combine to create a possibly-monopoly-causing artist management and ticketing monolith. The all-stock deal is valued at $2.5 billion.
The boards of both companies reportedly unanimously approved the deal on Monday afternoon, but waited until today to announce their intent to marry. Live Nation and Ticketmaster claim that their combination will save each company $40 million annually.
If the FTC and shareholders give the OK, the merger will be completed during the second half of 2009.
But that first hurdle will be a big one. Senator Chuck Schumer vowed to look into the deal in a statement released Tuesday.
MarketWatch: “This merger would give a giant, new entity unrivalled power over concertgoers and the prices they pay to see their favourite artists and bands,” he said. “It must be viewed skeptically and scrutinized with a fine-toothed comb by the Justice Department and the Federal Trade Commission…
Here’s how the deal breaks down for shareholders:
Under the terms of the deal, Ticketmaster shareholders would receive 1.384 shares of Live Nation common stock for each share of Ticketmaster they own, subject to certain adjustments defined within the agreement. Live Nation and Ticketmaster shareholders will each own approximately 50 per cent of the combined company.
Speaking of stock, how are Live Nation and Ticketmaster’s shares doing on the news? Both Live Nation and Ticketmaster’s stock is down roughly 5 per cent. So, after all that, it turns out that the market didn’t have a lack of confidence in each company, it just wasn’t optimistic about the concert industry as a whole. That’s encouraging.