EC delays ruling on publishing deal
EmptyBRUSSELS -- The European Commission has pushed back by five weeks the deadline for its ruling on Universal Music's $2.1 billion bid for Bertelsmann's BMG Music Publishing.
The delay, which pushes the decision to June 1, came after Universal Music parent Vivendi, called for more time as it prepared to defend a merger that would create the world's biggest music publishing company.
In a statement, Universal said it requested the extension, "to give the commission sufficient time to consider properly the merits of the merger in what would otherwise be an overly aggressive timetable."
"We remain confident that the merger will be approved," the company added.
Industry sources said Universal was concerned about how soon it would be able to provide the vast quantity of data sought by the commission, the European Union's antitrust regulator. "It's not a problem, but it is a huge amount to gather," one source said.
The timeframe is unusually short. Universal won the auction to buy BMG Music Publishing in September and filed its bid with the EC in November, but it was only on Dec. 8 that the commission announced it would open an in-depth merger investigation, just as its officials were due to leave Brussels for their traditional two-week Christmas vacation. The probe itself also has seen a change, as the head of the EC unit investigating the merger has just been replaced.
BMG and Universal each have about 11% of the market and have the world's third- and fourth-largest music publishing catalogs. If approved, they will have a 22% combined market share, about two points more than market leader EMI.
European Union clearance is the last regulatory hurdle for the takeover, which was cleared in November by the Federal Trade Commission and the Justice Department in the U.S. EC officials say their investigation is concentrating on whether cutting the number of major publishers would push down fees for publishing rights or hurt conditions for European song writers.
Vivendi beat off rivals EMI Music Publishing and Warner/Chappell Music to purchase BMG Music Publishing, whose archive of more than a million songs includes 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.
The delay comes just seven months after the Court of First Instance, the EU's second-highest court, annulled the BMG merger with Sony, saying the EC had been wrong to approve it. However, the music publishing purchase should face fewer problems as it does not deal directly with consumers and, therefore, prices.