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Horizontal integration: Viagogo buys rival StubHub in $4bn deal

Graham Watson

25th November 2019

A number of things to note for students of business economics about this mega-merger between Viagogo and StubHub.

In the first place, the massive fee - $4bn, for a company that eBay bought 12 years ago for $310m in 2007. Even more remarkably, Viagogo paid cash.

Secondly, look at the justification for the deal offered by Viagogo "Buyers will have a wider choice of tickets, and sellers will have a wider network of buyers. Bringing these two companies together creates a win-win for fans - more choice and better pricing."

Do you believe ths? Isn't it the case that there are now fewer firms in the market. Not if you believe Viagogo who argue that the new business simply provides a platform for ticket sellers and as result they argue that this will keep prices down.

However, given the regulatory run ins that Viagogo has had with the Competition and Markets Authority, it is likely that there are going to be a number of regulatory hurdles to clear before the merger is approved.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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