Sony-Led Group Wins EU Approval to Buy EMI Unit
A Sony Corp.-led group won European Union approval for its $2.2 billion purchase of EMI Group’s music publishing unit after it agreed to sell rights to chart hits by Robbie Williams and Ozzy Osbourne.
The European Commission approved the deal after the Sony group offered to sell the global rights to EMI’s Virgin catalogs and Sony/ATV Music Publishing’s Famous U.K. portfolio, the regulator said in an e-mailed statement.
Sony and Mubadala Development Co. “have offered to divest valuable and attractive catalogs containing bestselling titles as well as works of successful and promising authors,” said EU Competition Commissioner Joaquin Almunia in the statement. “I am therefore satisfied that the competitive dynamics in the online music publishing business will be maintained.”
The deal will give the Sony group control of EMI’s publishing rights to classics such as “New York, New York” and “Stand By Your Man,” adding to a portfolio of songs by Elvis Presley, the Beatles and Bob Dylan. Sony/ATV, the joint venture formed in 1995 that is co-owned by Sony Corp. (6758) and Michael Jackson’s estate, will oversee the new business.
The Sony consortium, which includes billionaire David Geffen and Mubadala, an investment unit owned by the Abu Dhabi government, “is pleased that commission’s issues were addressed in its initial review period so that the transaction could be approved,” said Jimmy Asci, a spokesman for Sony/ATV in New York in an e-mailed statement.
The Sony group’s offer to sell the song catalogs eliminated antitrust concerns about the company’s control over online rights for chart hits by British and American artists, the EU said. “Anglo-American chart hits are an indispensable part of any online platform offering to consumers,” it said.
Dylan Jones, a spokesman for EMI, and Warner Music Group, an unsuccessful bidder for EMI, both declined to comment.
Citigroup Inc. (C) agreed in November to sell EMI Group’s recorded-music and publishing businesses in separate transactions for a combined $4.1 billion. Universal will buy EMI’s record labels, home to Katy Perry and Coldplay, for 1.2 billion pounds ($1.9 billion), according to statements in November.
Impala, a Brussels-based group of independent record labels that opposed the deal, is convinced that “the impact of this merger on the livelihood of authors has been underestimated, while the ability of the remedies to secure future competition has been overestimated,” Helen Smith, the group’s executive chair, said in an e-mail.
Impala also opposes Vivendi’s Universal Music Group for EMI’s recorded music business, on worries of increased prices and reduced competition in the music industry. EU regulators have a deadline of Sept. 6 to rule on the Universal deal. The group challenged the EU’s 2004 approval for Sony and Bertelsmann AG to create the Sony BMG record label at the EU courts, forcing a re-examination by regulators. The deal was eventually approved in 2007.
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