UMG-BMG publishing deal OK'd
$2.1 bil merger earns EC approval after divestituresUniversal Music Group was cleared last week to take over BMG Music Publishing when the European Commission gave the green light after a five-month investigation into the €1.6 billion ($2.1 billion) music publishing merger (HR 5/23).
The European Commission — the European Union's antitrust authority — said that Universal had responded to initial "serious doubts" about the proposed merger by offering to sell off the rights of key labels in the music giant's roster. The eventual concessions would include the sale of Rondor U.K., Zomba U.K., BBC Music, 19 Songs, 19 Music as well as a European license for the Zomba U.S. catalog.
"The proposed merger, as initially notified, raised serious doubts as regards adverse effects on competition in the market for music publishing rights for online applications," the commission said. "However, the commission's investigation found that these concerns would be removed by the remedies package proposed by the parties concerning the divestiture of a number of publishing catalogs."
EU competition commissioner Neelie Kroes said the concessions were vital in an environment where digital music had the potential to change the face of the European music industry. "I am satisfied that the significant remedies will keep these markets competitive and ensure that consumers will not be harmed by the merger," she said.
The decision was welcomed by Universal. "This is an historic moment for us as we combine the best creative and strategic assets of these two very accomplished publishing businesses," UMG chairman and CEO Doug Morris said.
UMG president and COO Zach Horowitz said the merger will create a publishing business "better suited to serve songwriters, composers and business partners in this challenging marketplace."
The merger company will operate under the Universal Music Publishing Group brand and will be led by David Renzer, current chairman and CEO. Renzer will continue to be based in Los Angeles and report to Horowitz.
EU clearance is the last regulatory hurdle for the takeover, which was cleared in November in the U.S. by the Federal Trade Commission.