EU to approve Universal's €1.5bn purchase of EMI
UNIVERSAL MUSIC Group will win European Union approval for its $1.9 billion (€1.5 billion) purchase of EMI with its offer to sell global rights to some of EMI’s most valuable record labels and catalogues, two people familiar with the deal said yesterday.
Citigroup, which is selling EMI, had acquired it from buyout group Terra Firma – which had defaulted on loans owed to the investment bank. The proposed deal will cement Universal’s top position in the European music industry.
Universal, owned by French group Vivendi, proposed in July to meet anti-trust concerns by selling the bulk of Parlophone, one of EMI’s most prized assets with star acts such as Coldplay and Queen, EMI chief executive Roger Faxon told staff at the time.
The package of concessions also included the divestment of the Mute, Ensign and Chrysalis labels, as well as EMI Classics, Virgin Classics and EMI units in France, Belgium, the Czech Republic, Poland, Portugal, Sweden and Norway. It also includes Universal brands Sanctuary, Co-Op and Universal’s Greek unit. That offer, which referred only to European rights, was made after the European Commission warned Universal its proposed deal would impede competition and that the combined group would need to cut its market share to below 40 per cent.
Universal has since broadened the scope of the concessions after a market test by the commission, which acts as EU competition regulator, showed rivals were not happy with the focus on EU rights, one of the sources said. “The scope of the concessions is likely to be global rather than limited to the EU,” said the source, who declined to be identified because of the sensitivity of the matter.
The European Commission declined to comment. It has set a September 27th deadline for its decision. Universal and Vivendi also declined to comment.
Vivendi chief financial officer Philippe Capron said last week the group still viewed the EMI buy as a good deal, even if it had to make significant concessions such as selling 40 to 60 per cent of EMI’s European catalogue to get the deal approved.
The EU executive allowed a Sony-led group to buy EMI’s music-publishing business in April after a pledge to sell the worldwide publishing rights of artists including Robbie Williams.
The US Federal Trade Commission is also examining the Universal-EMI deal. Competition regulators in Canada, Japan and New Zealand have cleared the takeover. – (Reuters)