UK regulator to investigate AEG Facilities-SMG merger deal

The UK’s Competition and Markets Authority (CMA) announced today (Thursday) that it has launched a preliminary investigation into the proposed merger between venue management services company SMG and AEG Facilities, the venue management subsidiary of sports and entertainment firm AEG.

The two firms announced plans to merge in February, with the deal set to create a new, standalone global facility management and venue services company that will operate as ASM Global. Private equity firm Onex, SMG’s parent company, and AEG’s subsidiary will each own 50 per cent of the company following the completion of the transaction.

The CMA announced today that it is investigating the proposed acquisition of joint control over Wildlife Holdings – the likely new name of the company that will trade as ASM Global – by AEG and Onex. This follows the European Commission’s decision to partially refer the case to the UK.

In a statement released today, the CMA said: “The Competition and Markets Authority is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether 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.”

Should the merger proceed, ASM will be headquartered in Los Angeles, with key operations based in West Conshohocken, a suburb of Philadelphia. The merger would result in the new company operating more than 310 venues across five continents.

Under the terms of the merger, AEG will retain ownership of its real estate holdings outside of this venture, including its entertainment districts and owned venues in Los Angeles, London, Hamburg and Berlin, as well as its extensive development, sports, music and sponsorship divisions. Onex is contributing its entire equity investment in SMG into the merger.

AEG Facilities president Bob Newman is scheduled to become president and chief executive of ASM. Wes Westley, chief executive and president of SMG, is set to join ASM’s board of directors, where he will actively support the merger integration.

AEG Facilities’ arena portfolio includes Staples Center in Los Angeles, as well as other major US venues in the shape of Barclays Center (pictured), T-Mobile Arena, Prudential Center and American Airlines Arena. Outside of the US, the firm has partnerships with The O2 and SSE Arena in London, Mercedes-Benz Arena in Berlin and Shanghai, AccorHotels Arena in Paris, Barclaycard Arena in Hamburg and RAC Arena in Perth.

Its stadium portfolio includes Stockholm’s Friends Arena and Tele2 Arena, Dignity Health Sports Park in Los Angeles, Oakland–Alameda County Coliseum and Suncorp Stadium in Brisbane.

SMG’s stadium portfolio includes a host of the top venues in the US such as the Mercedes-Benz Superdome, NRG Stadium, Soldier Field, State Farm Stadium, TIAA Bank Field and U.S. Bank Stadium. Its arena clients include Smoothie King Center in New Orleans, along with Manchester Arena and First Direct Arena in Leeds, England.

Image: Tandonva