MUMBAI: The European Commission has approved Access Industries Inc., the parent company of Warner Music Group to acquire Parlophone Label Group (PLG).
The commission cleared this acquisition after the investigation confirmed that the proposed transaction would not raise competition concerns, in particular as WMG will continue to face competition from the two remaining major music companies, namely Universal Music Group (UMG) and Sony, as well as from independent music labels.
UMG has to divest in order to obtain the Commission’s clearance for its acquisition of EMI’s recorded music business. In 2011, EMI’s music arm was sold to UMG, and EMI’s publishing business to a Sony/ATV group. PLG comprises the majority of the EMI assets, including the iconic Parlophone label.
The Commission examined the competitive effects as per the EU Merger Regulation. The effect of the proposed acquisition in the markets for the wholesale of physical and digital recorded music in the European Economic Area (EEA) and in several Member States where both companies are active was closely examined.
WMG has limited market shares and that the increment in market share deriving from the proposed acquisition is rather limited in most of the affected territories.
It further showed that following the transaction, WMG will continue to face competition from the two other majors, as well as from independent music labels. This helped EU commission draw a conclusion that the proposed transaction would not have anti-competitive effects in any of the affected markets.
It was pointed out that that the proposed transaction may actually reinforce competition, as it may lead to an increase of the competitive pressure exercised by WMG on both UMG and Sony.
The transaction was notified to the Commission on 5 April.