Live Nation, one of the world's largest concert promoters, has reached an agreement with Tickemaster which will see the two companies enter into a "merger of equals" to create a major new entertainment company.

The new organisation, called Live Nation Entertainment, is expected to be worth around US$2.5bn (£1.7bn) once the deal is finalised in the second half of 2009. Shareholders of both Live Nation and Ticketmaster will own approximately 50 per cent of the new, combined company, which aims to bring about improved access and transparency for fans, better ticket pricing options, increased event attendances and upgraded ticketing technology.

Live Nation is currently responsible for more than 22,000 concerts a year in 57 countries worldwide, as well as the Download, Reading and Leeds festivals in Britain. Ticketmaster, the global ticketing agency established in 1976, is one of the largest e-commerce sites on the internet, and also has 6,700 retail outlets and 19 call centres across the world.

Michael Rapino, chief executive of Live Nation, said: "As every industry observer knows, too many tickets go unsold and too many fans are frustrated with their ticket-buying experiences. The current inefficiencies in the system result in higher costs and confusion over access to seats. "Together, we will work to simplify the ticketing process and ultimately increase attendance at live events. This is also a logical step in the evolution of our business model, creating a more diversified company with a stronger financial profile."

Irving Azoff, chief executive of Ticketmaster, added: "This merger, and the resources of these combined companies, will create a new dynamic and unique creative platform of choice for fans across all levels of the live entertainment experience."