The soft drinks giant's Pepsi Max brand will hold exclusive ticketing and drinks licences to 16 Live Nation venues.

Pepsi - known for its slogan The Choice of a New Generation - will help put on shows by big-name acts such as Rihanna and Jay-Z.

It will also partner the live entertainment group at ten festivals from Reading to The Big Chill.

California-based Live Nation is the world's largest concert promoter, annually producing more than 22,000 stage events for 1,500 artists in 57 nations.

Two years ago, U2 signed a 12-year performance deal with Live Nation. As part of it, the band were given stock in the company worth an estimated $25million.

Last month, the firm completed a controversial merger with the Ticketmaster agency.

Britain's Competition Commission gave it the green light - after originally turning it down fearing it would harm consumers.

It was thought the merger could stifle competition and force up concert ticket prices.

The tie-up with Pepsi is the second blow in a fortnight for Coca-Cola, which last week fell to third in the list of the UK's most valuable brands.

Coca-Cola already has a deal to work with Live Nation on music events around the rest of the globe and had been negotiating hard to bring the UK into the mix.

Live Nation president Simon Lewis said: "In Pepsi, we have a powerful alliance with a cola partner which shares our passion for offering fantastic live music experiences."

Pepsi's first Live Nation tie-in is the Wireless Festival in London's Hyde Park on July 4, with Jay-Z headlining.