MUMBAI: Universal Music and Sony Music have settled an agreement with Citigroup to acquire the rights of British record label EMI for combined $4.1 billion.
The transaction would split EMI Group in two, with the recorded music unit traded to Universal for approximately $1.9 billion and the publishing divisions sold to Sony for $2.2 billion. Sony is considered as an investor and partial owner in the deal, but will manage the business under its Sony ATV publishing business, which administers the publishing rights of 750,000 songs, including the Beatles catalog.
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The 114-year-old EMI Group is lead by Citigroup who took control after previous owner, Guy Hands’s Terra Firma private equity vehicle, could no longer support the label’s debts and failed a solvency test. Citigroup in October had asked for a minimum of $1.9 billion for the recorded music business and $2.5 billion for EMI’s smaller but more profitable publishing business.
In a statement Citigroup vice chairman and EMI chairman of the board Stephen Volk said, “We believe that this transaction accomplishes Citi’s objective of maximizing the value of EMI, giving EMI Music a partner in Universal Music that appreciates EMI’s rich cultural legacy, its incredible stable of musical talent, and its employees who work so hard to deliver successful outcomes for the artists they represent. We are grateful to Roger Faxon, his management team and all of EMI’s staff for the continued success of this business during Citi’s ownership.”
According to the International Federation of the Phonographic Industry Universal Music owned by Vivendi is one off the largest recorded music company in the world, with an estimated 27% of the global market. With the addition of roughly 9% of EMI share.
Vivendi CEO Jean-Bernard L?©vy said, “We are very proud to welcome EMI into the Vivendi family. We all respect the labels within EMI as well as the artistes and employees who contribute to its success. They will find within our Group a safe, long-term home, headquartered in Europe. We are confident that we will be able to create additional value for our shareholders thanks to our knowledge of the industry and our proven track record of successful integration.”
UMG chairman and CEO Lucian Grainge added, This is a historic acquisition for UMG and an important step in preserving the legacy of EMI Music. For me, as an Englishman, EMI was the pre-eminent music company that I grew up with. Its artists and their music provided the soundtrack to my teenage years. Therefore, UMG is committed to both preserving EMI’s cultural heritage and artistic diversity and also investing in its artists and people to grow the company’s assets for the future. As a result, we will be better positioned to fully capitalize on the many new and exciting opportunities in the current marketplace, and also able to better serve our artists, songwriters and business partners, while offering fans even more choice.”
The deals are subject to approvals by antitrust regulators in both the US and Europe.
