UPDATE 4-UK clears Ticketmaster/Live Nation deal

* Competition Commission reverses provisional ruling

* Says the two groups do not have incentive to harm others

* Concert promoter, ticket group welcome big 'milestone'

* Say are optimistic for U.S. regulatory review

* Ticketmaster, Live Nation shares up 4 to 6 pct
(Adds U.S. stock reaction, details on U.S. regulators'
concerns, analyst comment)

By Kate Holton

LONDON, Dec 22 (Reuters) - The proposed merger of two live
music giants, Live Nation Inc (LYV.N) and Ticketmaster Inc
TKTM.O, was given a huge boost on Tuesday when a British
regulatory body dropped its objections and approved the deal.

Britain's Competition Commission had said in October it was
concerned about the move to combine the world's largest concert
promoter with the leading ticketing group, saying fans could
wind up paying more to see their favourite artists.

Shares in both companies rose more than 5 percent in early
trading when markets opened in New York.

The provisional UK ruling had hit the share prices of both
companies in October and fueled expectations that a deal
frequently criticised by artists, fans and politicians could be
scuppered.

But in a shot in the arm for the Los Angeles-based firms'
hopes of gaining regulatory clearance in the United States and
Canada, the British body on Tuesday reversed its earlier
position.

Officials at the U.S. Department of Justice have had
"serious competitive concerns" that the combined company will
have too much control over ticket prices. The companies have
been discussing concessions in recent weeks, including
divesting some of the operations in the U.S.

However, Britain's Competition Commission said it now
believed the new entity would not have the incentive to hurt
rivals, and it was satisfied the deal would not damage an
existing partner of Live Nation's -- CTS Eventim AG (EVDG.DE).

It concluded the merger "will not result in a substantial
lessening of competition in the market for live music ticket
retailing or in any other market in the UK, including live
music promotion and live music venues."

"The UK decision is surprising but it sets the stage that
the deal could clear with U.S. regulators," said Tuna Amobi,
equity analyst at Standard & Poor's. "The only question might
be what conditions the Government might demand from the merged
company."

Live Nation executives said last month they now expect the
deal to close in the first quarter of 2010.

Ticketmaster makes much of its money by taking a fee for
selling and marketing tickets for a host of live events
including music, sports and the arts.

Shares in CTS Eventim were down 1 percent in Frankfurt on
Tuesday in a broadly higher overall market.

U-TURN UNUSUAL, NOT UNIQUE

Live Nation announced plans to buy Ticketmaster
Entertainment for about $400 million in stock in February,
drawing almost immediate criticism from some U.S. politicians
and artists who felt the combined group would have unrivalled
power over music fans and the prices they would have to pay.

The UK Commission, which described its reversal as unusual
but not unique, said it had looked into whether the combined
group would try to harm competitors, for example by restricting
the sale of tickets to other rivals.

"We found that, in most of these cases, the merged entity
would suffer significant and immediate losses, with very
uncertain prospects for long-term gain," it said.

"Therefore, we concluded that it was unlikely that the
merged entity would harm other ticketing agencies, promoters
and venues in these ways."

The two groups said they remained optimistic there would be
a similarly successful outcome in the U.S. and Canada. The deal
has already won regulatory approval in Norway and Turkey.

Shares in Live Nation were up 4.2 percent at $8.49 on
Tuesday morning on the New York Stock Exchange, while
Ticketmaster Entertainment were up nearly 6 percent at $12.44
on the Nasdaq.
(Reporting by Kate Holton; Additional reporting by Yinka
Adegoke in New York; editing by John Stonestreet and Matthew
Lewis)