Universal Music Submits EMI Deal Concessions to European Regulators
"We believe the package fully addresses the European Commission’s concerns," the company says.
LONDON - Vivendi's Universal Music Group said Friday that it has concluded its talks with EU regulators about its proposed $1.9 billion acquisition of EMI's recorded music business and submitted a list of concessions to win approval.
The list includes several divestitures, according to a source.
"Universal Music Group has submitted a package of remedies to the European Commission relating to its proposed acquisition of EMI Recorded Music," the music major said. "We believe the package fully addresses the Commission’s concerns and follows our constructive discussions with regulators, independent labels and competitors. We look forward to working further with the Commission and are confident of receiving clearance."
The EU regulators are expected to make their final decision in September. Vivendi had agreed to pay current EMI owner Citi in September - whether it gets regulatory approval for the deal or not.
STORY: Universal Music May Sell Coldplay Label Parlophone to Seal $1.9 Billion EMI Deal
A spokesman for UMG declined to detail which assets the company will sell or what other concessions it has made.
One source familiar with the situation said that UMG, which will control the sales processes and prices of businesses marked for divestiture, has received initial expressions of interest in various assets from around 20 buyers.
Another source said all of the proposed divestitures are just for Europe, with the licenses for those assets going back to UMG for all other territories.
Earlier on Friday, it emerged that UMG may be ready to sell British label Parlophone Records, the home of the Beatles and Coldplay, to win European regulatory approval for the EMI deal.
The firm is thought to be unwilling to sell music by some key Parlophone acts, including the Beatles and Queen, but Coldplay could be the biggest act that it would have to give up. (link to my morning story)
Previously, UMG eyed a sale of Virgin Records to founder Richard Branson as a key divestiture, but it wasn't clear if that was part of the final remedy package.
Observers have also suggested that UMG could offer to divest EMI Classics, as well as the distribution rights to independent label Mute to clinch European regulators' approval.
EU regulators have also expressed concerns about the market power of the combined entity, not only its market share. As a result, UMG is likely to have included in its remedy package promises about how the combined company would interact with competitors and handle such things as digital pricing.
One source said that UMG has expressed confidence that the EMI will still make financial sense for it after the concessions and that its promise to invest into EMI, with the help of the proceeds from asset sales, remains intact. That person also said that UMG believes that independent music labels will be pleased with key aspects of the remedy package.