EU to Formally Approve Universal Music-EMI Deal Friday
LONDON - European Union regulators will on Friday formally approve Universal Music Group's proposed $1.9 billion acquisition of the recorded music arm of EMI Group under conditions, the Wall Street Journal reported.
As expected, the music giant, owned by French entertainment and telecom conglomerate Vivendi, will have to sell its Parlophone label, which includes the likes of Coldplay and Queen. The Beatles catalog is excluded from the sales concessions, the Journal also confirmed.
But smaller EMI labels, such as Ensign, Mute, Virgin Classics and Chrysalis, are expected to be on the divestiture list, it said.
Under concessions made by the company, UMG must sell businesses contributing 60 percent of EMI's revenue in Europe, or around €350 million ($457 million), according to the Journal.
The European Commission and Vivendi and UMG executives have spent the summer months hammering out concessions acceptable to both sides, with some analysts having suggested that they may limit the financial benefits of the deal.
In the U.S., the Federal Trade Commission is expected to weigh in on the deal soon after approval in Australia earlier this week and various other territories before that.
Vivendi early this month paid most of the price tag to current EMI owner Citigroup as was required under the agreement.
Vivendi and UMG didn't comment, but one source confirmed that the companies were expecting formal EU approval on Friday.
The Journal detailed that UMG's sales will have to include EMI units in more than half a dozen European countries, including France, Spain and Sweden. It must also sell EMI's part of the Now music compilations labels, according to the Journal.
Potential buyers mentioned in recent weeks include Warner Music Group and BMG Rights Management, the music publishing joint venture of German media group Bertelsmann and investment firm Kohlberg Kravis Roberts, as well as possible financial firms.