UK Watchdog Advises StubHub and Viagogo to Halt Business Integration
Reading Time: 2 minutes The UK’s Competition and Markets Authority (CMA) advised StubHub and Viagogo to continue the integration of the two businesses until it clears its investigation into the sale.
In November, eBay announced it had reached a deal with London-based ticket marketplace Viagogo to sell StubHub for $4.05 billion in cash.
On December 13, the CMA launched an initial investigation about the proposed sale because it may result in a “substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
Today, the CMA issued an Initial Enforcement Order that prevents both companies from integrating its operations before the CMA fully vets the merger of both entities.
The CMA acted on fears that it believed the companies were on an aggressive integration timeline and decided it had to prevent substantial progress in the integration of the two ticket resale marketplaces until it could complete its inquiry.
StubHub and Viagogo Downplay Order
Both Viagogo and StubHub downplayed the order, and the companies released the following statements.
“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.”, Viagogo statement
“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.”, StubHub statement
Timing on this CMA Initial Enforcement Order is not ideal for eBay as the company is under pressure by activist investors to complete the sale and also explore spinning off its classifieds group to refocus on its core marketplace.
While it is unlikely the CMA will block the sale, eBay’s activist investors want clarity and progress on the restructuring of the marketplace.
READ MORE: eBay Again Put Under Pressure to Sell Classifieds Group – Focus on Core Marketplace
Do you think the CMA will prevent the merger from completing?
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Richard Meldner
Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.