CMA opens path to approving Viagogo’s £3.2bn StubHub takeover

The merger of ticket resellers Viagogo and StubHub looks set to be approved, after the companies reached a preliminary deal with the UK regulator.

The Competition and Markets Authority said it “proposes to accept” a series of promises from the companies, which would include selling off StubHub’s international arm.

Viagogo’s four billion US dollar (£3.2 billion) deal to take over StubHub has been faced with the prospect of being blocked by the CMA since the regulator started looking into the issue in December 2019.

The deal had been announced a month earlier, and would bring two companies with the same founder under the same roof.

It would mark the return of Eric Baker to StubHub, which he helped set up 21 years ago.

We're consulting on proposals requiring viagogo to sell all of StubHub's business outside of North America, after our in-depth investigation identified competition concerns.

Find out more: https://t.co/gfQjfRMadN pic.twitter.com/A8ocARMaPK

— Competition & Markets Authority (@CMAgovUK) March 22, 2021

After a falling-out with his co-founder Jeff Fluhr, Mr Baker left the US-based firm in 2005.

Months later he set up Viagogo, planning to do the same for the European market as StubHub had for the US.

A year later Mr Fluhr said: “I can certainly see why others would attempt to replicate our success; however, we feel that StubHub’s model is unparalleled and could never be executed in quite the same way.”

More than a decade on, in November 2019, Mr Baker announced his plans which would reunite “my two babies”, creating a giant in the ticketing industry.

But the deal has not proved easy. Just months later the global live events industry had collapsed, decimating the two companies’ revenues, according to estimates.

The potential CMA approval will clear an important hurdle, and after they sell StubHub’s international business it will allow the two companies to start teaming up.

Merger rules prevent firms from integrating while the regulator reviews takeovers using an interim order.

Normally this can hamper integration, but in an unprecedented year it could be even more troublesome, meaning the firms could not coordinate their response to Covid-19.