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CMA pauses StubHub/Viagogo merger

An initial enforcement notice (IEO) has been served based on "reasonable suspicion" that "arrangements are in progress or in contemplation" for the companies' integration

By IQ on 10 Feb 2020

The CMA's director of mergers, Richard Romney, served the enforcement order

The CMA's director of mergers, Richard Romney, served the enforcement order


The UK’s Competition and Markets Authority (CMA) has advised ticket resellers StubHub and Viagogo to halt any integration of the two businesses until it has finished investigating the proposed merger. In an enforcement notice published today, the CMA has banned the two firms from any integration between the two businesses.

Senior representatives of both StubHub and Viagogo are now required to report to the CMA every two weeks to prove that they are separate businesses. The CMA filed the notice, claiming it has “reasonable grounds for suspecting that it is or may be the case that arrangements are in progress or in contemplation which, if carried into effect, will result in [the two entities] ceasing to be distinct.”

A spokesperson for StubHub tells IQ the companies have not jumped the gun on the US$4 billion all-cash mega-acquisition, which was announced in late November – rather, that the serving of an IEO (initial enforcement order) is a standard part of the merger/acquisition process. The notice precludes actions including management changes, sharing of customer lists, merging of brand identities, integration of IT systems and negotiating on each other’s behalf.

“The requirement to hold separate the two businesses of Viagogo and Stubhub is an expected part of the merger process”

The deal has been in the crosshairs of the CMA since December. In a statement given to CityAM, Viagogo said: “The requirement to hold separate the two businesses of Viagogo and Stubhub is an expected part of the merger process and we fully acknowledge the importance of the CMA’s examination into the deal.”

Stubhub said: “As the CMA states in the order itself, we do not expect any impact to the planned close of the Stubhub and Viagogo transaction. We are on track as previously communicated to complete the sale by the end of the first quarter of 2020.”

While Viagogo founder and CEO Eric Baker is no doubt keen to retake control of a company he co-founded in 2000, and which was sold to ecommerce giant eBay for $310m seven years later, penalty of breaching the enforcement order is fines of up to 5% of the total turnover of both enterprises, or imprisonment for up to two years, or both.

 


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