Official paperwork that has been issued by the Competition and Markets Authority (CMA) to Live Nation about their deal to buy Isle of Wight Festival could mark the start of a long journey for all involved.
The CMA investigation is looking into whether Live Nation’s stake in Isle of Wight Festival will “result in a substantial lessening of competition in any market or markets in the United Kingdom”.
Phase one merger enquiry
The enforcement notice contains a long list of what must not happen while the CMA carry out their investigation.
This is what’s known as a Phase One Merger Enquiry and will take 40 working days to complete. During this time there’s an invitation for anyone interested to comment. Following that, one of two decisions can be reached. Firstly clearance, ie. no problem found with the merger, or secondly, competition concerns are found.
If concerns are found, the companies will be given five working days to come up with offers to resolve the problem.
Phase Two Enquiry takes six months
If the CMA are not satisfied that the offers remove the competition risk, a Phase Two Merger Enquiry could follow.
This takes six months to complete and involves an independent panel.
At the end of the Enquiry either of the two same decisions could be reached, clearance or competition concerns.
Restrictions
In the meantime the businesses must carry on as normal, not selling off any parts or rebranding etc until the CMA have made their decision.
Some of the restrictions include:
Except with the prior written consent of the CMA, Live Nation and LN-Gaiety shall not, during the specified period, take any action which might prejudice a reference of the transaction under section 22 of the Act or impede the taking of any action under the Act by the CMA which may be justified by the CMA’s decisions on such a reference, including any action which might –
- (a) lead to the integration of the Isle of Wight Festival business with the Live Nation business;
- (b) transfer the ownership or control of the Live Nation business or the Isle of Wight Festival business or any of their subsidiaries; or
- (c) otherwise impair the ability of the Isle of Wight Festival business or the Live Nation business to compete independently in any of the markets affected by the transaction.
Previous investigation
In 2009, the CMA carried out a Merger Enquiry between Ticketmaster Entertainment and Live Nation, Inc.
It lasted just over six months and was cleared after a Phase Two Enquiry.
The papers
Full details can be found below (prepare for the legalese)
Image: © Callum Baker Photography
