Whelan's, the iconic Dublin venue, which has been central to the development of the Irish music scene over the past 30 years, is at the centre of a major deal which sees the creation of a powerful new force in the Irish music, entertainment and hospitality sector. Whelan's was the venue for a number of very special gigs over the past few years, including an intimate show by Ed Sheeran (pictured).

The deal, which was announced yesterday, brings together The Mercantile Group and Capital Bars. The Mercantile Group is run by Frank Gleeson, and includes Whelan's in its portfolio. Among the other key businesses in the group are The Mercantile Bar and Venue, Pichet Restaurant, Opium, The Green Hen, East Side Tavern, Le Petit Parisienne and the very excellent Marcel's in Merrion Row, which was successfully refurbished last year.

Among the establishments in the Capital Bars group are Cafe-en-Seine, Soder + Ko restaurant in George's Street, Howl At The Moon and The George – which is one of Dublin's most iconic pubs, through its long association with LGBT culture in Ireland.

The new company, under which all of the operations will be merged, will employ 600 people. Anticipated revenues will be in the region of €40 million.

The company will be led by Frank Gleeson, who has had an impressive track record of making the businesses in his portfolio thrive, despite the difficult climate of the past ten years in the Irish economy.

The Capital Bars group has gone through a lot of changes in recent years, but was bought by Danu Partners, a company founded in 2009 by Mark O'Meara, Leonard Ryan and Michael O'Rourke – better known for having founded Setanta Sports. According to reports, the group also owns the UK franchise for the U.S.-based Smith & Wollensky chain.

Frank Gleeson has spoken of the deal as transformational and he is right. The combined entity has the potential to become a major player in the hospitality business not just in Ireland – where it already ranks among the market leaders – but also in the U.K.