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OFT refers anticipated acquisition by Hamsard 2786 Ltd (a company jointly controlled by Live Nation (Music) UK Ltd and Gaiety Investments Ltd) of Academy Music Holdings Ltd

126/06    21 August 2006

The OFT today referred the anticipated acquisition by Hamsard 2786 Ltd (a company jointly controlled by Live Nation (Music) UK Ltd and Gaiety Investments Ltd) of Academy Music Holdings Ltd to the Competition Commission (CC).

The OFT has decided that the test for reference is met in relation to the ownership and management of indoor live music venues in London.

John Fingleton, OFT Chief Executive, said:

'The OFT assessed whether sufficient competition would remain after this merger involving the two closest competitors in indoor live music venues in London. 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. 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.'

In a Phase One investigation such as this, the ability of merging parties to offer undertakings that resolve competition concerns that are clear cut, and capable of ready implementation, is key. Here, the OFT considered that the undertakings offered by the parties would not address the loss of competition arising from the merger, and were therefore not appropriate.

The CC is expected to report by 2 February 2007.

NOTES

1. The Reference Test - The OFT has a duty to make a reference to the CC if the OFT believes 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 creation of a relevant merger situation; and the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.

2. Under the Enterprise Act 2002 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; or as a result of the transaction, in relation to the supply of goods or services of any description, a 25 per cent share of supply in the UK (or a substantial part thereof) is created or enhanced.

3. The CC may extend the 24 week period within which it is required to publish its report by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.

4. A Phase One investigation refers to a first stage merger investigation which in the UK is the investigation carried out by the OFT, as opposed to a more in-depth investigation by the CC.

5. The text of this decision will be published in the mergers section as soon as is reasonably practicable.

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