Universal’s EMI Bid Said to Face Vote Paving Way for EU Ruling
Universal Music Group’s 1.2 billion- pound ($1.9 billion) bid for EMI’s recorded music business faces a key vote by national regulators late next week, paving the way for a European Union ruling, according to three people familiar with the situation.
A positive vote on the deal by the national agencies may allow the European Commission to rule on the purchase as soon as a Sept. 19 meeting, said two of the people, who couldn’t be identified because the process isn’t public.
Vivendi SA (VIV)’s Universal Music has offered to sell global rights to EMI labels it earlier pledged to divest to eliminate regulators’ concerns that the deal could make the world’s largest record company too powerful in some European markets, one of the people said.
Universal Music’s revised package of asset sales adds to an earlier proposal to sell 60 percent of EMI’s European assets, two people said earlier this month. Extra concessions may make the iconic London-based label less attractive for Paris-based Vivendi, saddled with debt and under investor pressure to improve earnings, as it faces a deadline next month to pay for EMI.
The extra remedies include the sale of global rights to Parlophone Records, home to Coldplay and the Beastie Boys, according to one of the people.
The commission said it couldn’t confirm the announcement date for its decision, which must be taken by commissioners at one of three sessions before a Sept. 27 deadline, according to a press officer who declined to be named in line with official policy.
Representatives of national competition agencies from the 27 EU states must give their opinion on in-depth merger probes before the commission can deliver a final ruling.
Universal Music officials declined to comment on any offer or the timing of any decision. EMI Music also declined to comment.
Citigroup (C) agreed in November to sell EMI’s recorded music and publishing business in separate transactions for a combined $4.1 billion. Universal Music agreed to buy EMI’s recorded division while a Sony Corp.-led group agreed $2.2 billion for publishing. Citigroup seized EMI from Guy Hands’s private equity firm, Terra Firma Partners Limited, in February 2011 after it failed to meet loan terms. Hands bought EMI for 4 billion pounds in 2007.
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