Music industry rivals Live Nation and Ticketmaster are in talks to merge, according to the Wall Street Journal.

The deal, which would be an all-stock transaction, would create a music industry giant worth over $700 million. Reports speculate that a deal could be announced as early as next week.

If the concert promotion and ticket sales companies do agree to a transaction, it would likely raise the attention of regulators. In 1994, Ticketmaster faced antitrust complaints in a case against rock band Pearl Jam. The suit appeared before the Antitrust Division of the United States Department of Justice before ultimately reaching a settlement.

In an analyst report obtained from Thomson ONE, Citi analyst Mark Mahany noted that Ticketmaster would benefit from additional ticket slaes, but regulatory concerns would be a significant concern “given each company’s leading position in their respective industries.”

Recently, Live Nation has made efforts to diversify its business activities by expanding into additional areas of music industry. Last month, Live Nation launched its own ticketing service.

In October 2008, Ticketmaster acquired Front Line Management a management company that represented about 200 major artists.

Both companies have been hurt by music industry woes in recent years as well as a battle for each other’s business. Ticketmaster has gone from a year-high of $25.08 per share in August to a $3.68 low in December. Live Nation shares have fallen over the past year from a yearlong high of $17.48 in August to $3.06 in late November.

Previously, Live Nation was part of Clear Channel Communications Inc. The Beverly Hills, California-based concert promoter spun off from Clear Channel in December 2005. Ticketmaster was a unit of InterActiveCorp until August 2007.

Live Nation's shares opened on Wednesday at $5.91 and fell to a low of $4.99. Ticketmaster shares opened at $6.45 and rose to a high of 7.22 per share.

Calls to Live Nation were not returned. A spokesman for Ticketmaster declined to comment.