16/10    10 February 2010

The OFT has today cleared the acquisition by Ambassador Theatre Group of the theatres formerly owned by Live Nation.

Ambassador and Live Nation owned the two major portfolios of theatres in the UK, with venues in 22 locations including the West End of London.

The OFT investigated the completed acquisition on its own initiative following receipt of a complaint from a concerned third party. A number of additional parties also raised concerns during the OFT's investigation. These concerns were broadly that, post-merger, Ambassador would face less direct competition, giving it the ability to increase prices to producers, foreclose rival theatres by cross-selling a portfolio of theatres to producers, and foreclose rival producers by restricting access to its enlarged portfolio of theatres.

After careful consideration of all the evidence, the OFT believes that there is no realistic prospect of theatregoers losing out through higher prices or an overall reduction in choice of productions or theatres.

First, the OFT was not presented with convincing evidence that the parties' theatres competed closely pre-merger.

Second, in particular given the way that producers purchase theatres for tours, Ambassador would not have the ability and incentive to cause independent rival theatres to close.

Finally, Ambassador would not have any ability and incentive to foreclose other producers given that it has only a very limited presence in theatre production and that rival producers provide the vast majority of high quality musical content to regional theatres.

The OFT has therefore cleared the merger and will not be referring it to the Competition Commission.

Alastair Mordaunt, OFT Director of Mergers, said:

'This acquisition creates a very sizeable organisation at the core of this culturally important industry, and a number of producers and theatre operators were concerned about the effects this may have on audiences.

'The OFT undertook a rigorous examination of the market, and we are confident that the merger will not result in a drop in the standard of performances or higher ticket prices for theatregoers.'

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 a relevant merger situation has been created, and the creation of that situation has resulted, or 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 text of this decision will be placed on this website as soon as is reasonably practicable.

4. While the majority of mergers reviewed by the OFT arise from voluntary notification by the parties, the OFT's own-initiative enquiry programme has led to remedial action by the OFT or CC in 21 cases under the Enterprise Act. In some of these cases, it is always possible that the parties would have voluntarily notified the OFT of their merger at a later date. The OFT has a dedicated Mergers Intelligence officer responsible for monitoring non-notified merger activity and liaising with other competition authorities. That person can be contacted confidentially at mergers.intelligence@oft.gov.uk if any interested party wishes to make the OFT aware of a merger that it considers might potentially be anti-competitive.