Universal Music, European Regulators Discuss EMI Deal Remedies
The music giant could submit its formal offer of asset sales and behavioral promises this week.
LONDON -- Universal Music Group top executives and European regulators in Brussels were on Wednesday discussing remedies, including asset sales, that would win the music giant approval for its proposed $1.9 billion takeover of the EMI recorded music business.
Sources said the meetings were in progress Wednesday, with one person familiar with the situation saying the process was fluid as regulators asked for clarifications on certain points and both sides focusing on resolving issues rather than following a strict time table.
With the interactions possibly continuing into late Wednesday or into Thursday, UMG could file its formal set of proposed asset sales and behavioral remedies on Thursday or Friday, one observer said.
UMG has signaled in recent weeks that it would work more closely with regulators to get the green light for the deal in September following the summer holidays that tend to let European government and official business grind to a halt in August. UMG parent Vivendi is keen to get the approval as it agreed to start paying for EMI in September whether it has regulators' okay or not.
The European Commission, which watches over EU competition issues, has expressed concern that the combined company would have too big a market share in certain countries. Any remedies offered by UMG are likely targeted to alleviate such concerns.
UMG boss Lucian Grainge last week said that he was prepared to divest some businesses and agree to behavioral measures on pricing and content deals with other companies.
Virgin Records and EMI Classics are believed to be among those labels that UMG could be ready to sell outright or where it could give up certain rights. It is also reportedly looking at a potential sale of distribution rights to independent label Mute.
Virgin Records founder Richard Branson this week said he would be ready to bid for Virgin if UMG decided to sell it.
UMG has so far only said that it has been working "constructively" with the European Commission and that it remains "confident of clearance." A spokesman on Wednesday declined to comment on the state of discussions with regulators.