Financial terms of the deal were never disclosed, but the proposed merger hit a stumbling block in May when the Competition and Markets Authority (CMA) announced it was launching a "phase 1" inquiry into the acquisition.
As a result of that preliminary investigation, the CMA has found that any merger between the two music companies could result in less competition in the music promotion industry in Northern Ireland.
Announcing its findings July 11, the government agency notes there are only a few rival music promoters in the region, most of which rely on Ticketmaster to sell tickets to their events.
"As Live Nation already owns Ticketmaster, the CMA is concerned that if it were to acquire MCD, it may be able to stop rival promoters selling tickets through that platform post-merger," reads a statement on the authority's website.
"This could result in less competition in promotion services to artists, leading to higher prices for concert goers, as well as a smaller variety of live music events to choose from," it goes on to say.
As part of its inquiry into the proposed merger, the CMA also looked into other aspects of the companies' businesses, such as music festivals and access to music venues, but said that it does not have competition concerns in these areas.
The merger will now be referred for a "phase 2" investigation -- to be carried out by a group of independent CMA panel members -- unless LN-Gaiety and MCD can offer what the CMA calls "acceptable undertakings" to address its concerns.
In a statement, Desmond said "we will work with the CMA to allay any concerns they have."
In 2017 the CMA investigated Live Nation's acquisition of the Isle of Wight Festival over similar concerns of lessening competition in the U.K. live music market. In that instance, the deal was cleared at the first stage.