Update: Earlier today (May 27), Live Nation released an amended disclosure notifying shareholders that arbitration proceedings with CIE and Grupo Televisa had officially commenced.

Live Nation has terminated a planned $480 million acquisition of Mexico’s largest promoter OCESA Entretenimiento, but a future agreement is still possible, a source tells Billboard.

Monday (May 25), Live Nation officials notified Corporación Interamericana de Entretenimiento (CIE) and Grupo Televisa that Live Nation was terminating a stock purchase agreement to acquire a controlling interest in the Mexican concert company following the occurrence of a “material adverse effect” — likely the COVID-19 crisis. Live Nation chief executive Michael Rapino previously announced that the deal was being put on hold during a May 7 earnings call, saying company officials planned to “evaluate the impact of the global COVID-19 pandemic on OCESA’s business and operations” in Mexico and the rest of Latin America.

Live Nation and OCESA’s owners entered into a separate standstill agreement to discuss modifications to the acquisition, but were unable to agree to new purchase terms before the standstill agreement expired.

CIE and Grupo Televisa are expected to contest the termination and the three parties will soon begin arbitration proceedings. Live Nation officials intend to seek a declaratory judgment from an international arbitration body that the company has properly terminated the purchase agreement.

A new deal with modified terms is still possible, sources tells Billboard, although Live Nation would likely want changes made to the agreement to mitigate any uncertainty caused by the pandemic.

“Longterm we’re still bullish on their business and ours, we want to be in business with OCESA and get the deal done, but we’re not sure where Mexico stands” with managing the COVID-19 crisis, Rapino told analysts on the May 7 earnings call. “I’m not looking to take on any losses from Mexico while they’re going through their six or eight months of a business downturn and come out the other side. Ideally we’d want to get the deal done, we want to delay the cash payment of the deal until we know we are on the other side of this crisis — that’s the intent.”

The acquisition was first announced in July of last year, but wasn’t approved by Mexican regulators until mid-April 2020. Live Nation and OCESA have been partners in Mexico for years, both in Ticketmaster and in touring and festivals.

In 2018, OCESA/CIE was the highest-grossing Latin promoter on the Billboard Year-End Boxscore charts and the fourth highest grossing promoter overall. On the 2019 year-end charts, it was the third highest grossing promoter, only behind Live Nation and AEG, reporting $233.2 million in ticket sales for 936 events in front of 4.3 million fans.

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