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Bertelsmann Completes BMG Buyout

Bruno Mars PR Portrait Three - H 2012
James Mooney
BMG is the world's fourth-largest music rights company with a catalogue of more than a million songs.

The deal gives the German media giant rights to more than 1 million songs from the likes of Bruno Mars, Will.i.am and Johnny Cash.

COLOGNE, Germany - German media giant Bertelsmann has completed its takeover of music rights group BMG, buying the 51 percent stake held by private equity group  Kohlberg Kravis Roberts & Co. to secure full control of BMG.

The deal, which will see Bertelsmann administer BMG's rights catalog of more than 1 million songs, with works from such recording artists as Bruno Mars, Will.i.am, Johnny Cash and Duran Duran, has received the necessary regulatory approval.

Financial terms of the deal have not been disclosed but media reports put the price tag at the low-to mid-three digit million Euro range with Bertelsmann also taking on some of BMG's debt.

The BMG takeover marks Bertelsmann's return to the music business. The German group pulled out of the traditional music business in 2008 when it sold its recorded music business to Sony Corp. In 2009 it launched the BMG music rights business with KKR as a financial partner. BMG made a number of acquisitions in the U.S. and across Europe and now operates in eight core countries.

Based in Berlin, the new BMG is focused on the management of digital rights and providing music services - a business Bertelsmann sees as having substantially more growth potential than the recording industry. Bertelsmann CEO Thomas Rabe has said after earning around $390 million (€300 million) last year, BMG is targeting revenue growth to hit $655 million (€500 million) over the next 4-5 years.