Answer:
This is a horizontal merger since both companies competed against each other in the past with similar products or services. As the number of firms decreases, competition between the remaining firms will become fierce.
This is an offensive move by Live Nation since its aim is to gain competitive advantages and market power. Competitive advantages resulting from this merger might be: higher market share, lower operating costs, synergy and efficiency.
If we look at it form Ticketmaster's point of view, this could be considered a defensive move. The main advantage achieved by Ticketmaster is less competition since Live Nation was the world's largest concert promoter.
Even though the merger happened during the great recession, 2009, the value of the new company has increased from a little over $800 million to almost $3 billion. That means that did something right. They were basically able to use resources more efficiently and gain even more market share. They are so large now, that some accuse them of being a monopoly.
In this case, the merger between Live National and Ticketmaster is a horizontal merger.
From the information given, it is a horizontal merger because it is a merger between the companies that are in the same or similar industry. In this case, there would be a strengthening of competitive position as there will be an increase in market share.
The merger is important as it will help reduce cost as well as increase efficiency. With this strategic move, Live Nation or Ticketmaster has allowed itself to gain a more competitive advantage. By creating a larger market share, the timing will make it harder for new entrants to gain entry into the market.
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