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Viagogo and StubHub’s $4bn merger to face further review


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What’s worse than agreeing to pay $4bn to buy a live-event ticketing company just before a global pandemic shuts down live events across the world? Having the planned merger held up due to regulatory investigations, that’s what.

Viagogo completed its acquisition of secondary ticketing rival StubHub in February this year, but the two companies aren’t allowed to integrate their businesses until they get the green light from UK regulator the Competition and Markets Authority (CMA).

Earlier this month, it raised fresh concerns that the deal could be bad for competition in the secondary ticketing market, and gave Viagogo five days to address those concerns, to avoid facing an in-depth ‘phase 2’ investigation. It seems it was not satisfied with the answers, and yesterday that investigation was announced, with its report due by 9 December.

That means Viagogo and StubHub must continue to ride out the Covid-19 pandemic as separate entities. “During this period, the StubHub and Viagogo brands and operations will continue to be held separate as agreed with the CMA,” StubHub’s spokesperson told Reuters.

Anti-touting group FanFair Alliance, which has opposed the merger from the off, issued a statement celebrating the CMA’s decision. “Even in the midst of the Covid-19 crisis, the thought of such a business monopolising ‘for profit’ secondary ticketing remains highly problematic,” said its head Adam Webb. The bigger picture here is, however, about the survival prospects for Viagogo and StubHub.

A recent Forbes article on the acquisition (titled ‘Worst. Deal. Ever.‘ which gives you a sense of its tone) noted that Viagogo boss Eric Baker had paid $2bn in cash and raised $2bn in debt to fund the deal; cited analysts’ estimates that Covid-19 was “wiping out at least 90% of StubHub and Viagogo’s revenues”; and pointed out that the companies “rely not just on live events… but also on excess demand for those events that forces buyers to the secondary market. That could take years”.

Eamonn Forde

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