Academy Takeover Referred To Competition Commission
Announcing its decision August 21st, the U.K.’s Office of Fair Trading said the deal could result in a substantial lessening of competition within the market.
At press time, it wasn’t possible to get comment from Rapino, Desmond or Live Nation U.K. chief exec Paul Latham.
The OFT considered that the undertakings they offered would not address the loss of competition arising from the merger, and were therefore not appropriate.
“On the basis of the evidence received, the OFT is concerned that other indoor venues would not represent sufficient competitive constraints on the merging parties post merger,” OFT chief exec John Fingleton explained. “This applies in particular to venues of a certain size in London. Non-competitor third party concerns about this merger were coherent and consistent and supported the OFT’s analysis.”
The OFT has a duty to make a reference to the CC if it believes arrangements are in progress or in contemplation that, if carried into effect, could result in the creation of a relevant merger situation that might lead to substantial lessening of competition.
Under the 2002 Enterprise Act, a relevant merger situation is created if two or more enterprises have ceased to be distinct enterprises and the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £70 million. Another possible instance is if, as a result of the transaction, in relation to the supply of goods or services of any description, a 25 percent share of supply in the U.K. (or a substantial part thereof) is created or enhanced.
The Competition Commission has a statutory commitment to give a ruling within 24 weeks, which expires February 2nd. But that period can be extended if it determines that special circumstances slowed the process.
The proposed deal would see Hamsard 2786 Ltd, the company Live Nation and Desmond’s Gaiety Investments formed to buy
Either Hamsard or Live Nation already has ownership or control of London’s Hyde Park,
– John Gammon