EC sets ruling date on UMG-BMG merger

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BRUSSELS -- The European Commission Monday has set Dec. 8 as its deadline for ruling on whether Universal Music Group can buy BMG Music Publishing.

The EC -- the European Union's antitrust authority -- promised a speedy investigation of the merger of the two publishing giants, who will become the world's biggest song rights company if the deal is cleared.

Universal's  €1.6 billion ($2.1 billion) plan to buy BMG Music Publishing will face particular scrutiny as it comes just four months after an EU court overturned the EC's 2004 decision to clear a merger between Sony and Bertelsmann's music units.

The shock court ruling raised questions about the way the EC examines merger plans and, although the publishing deal is a different area, officials will be under pressure to show they have conducted a thorough analysis of the music sector before reaching any conclusions.

In spite of the tight inspection, Universal's purchase is expected to be given the green light as the combined entity is not expected to equal more than a quarter of the overall market, so there is little risk that it will impede effective competition in the market for music publishing in the EU. BMG Music and Universal each have about 11% of the European music publishing market. If approved, they will have a 22% combined market share, about two points more than market leader EMI.

Vivendi, Universal's parent, beat off rivals EMI Music Publishing and Warner/Chappell Music in September to purchase BMG Music Publishing, whose archive of more than a million songs includes tunes by Coldplay, Britney Spears and Robbie Williams. BMG is expected to complement rather than overlap the Universal catalog that includes such artists as U2 and Elton John.
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