Sony Files EMI Merger Application in Europe
Sony’s effort to absorb EMI Music Publishing, one of two proposed deals that would further consolidate the music industry, moved forward a step on Monday when the company filed its formal merger application with the European Commission.
Sony led an investment group that in November bid $2.2 billion for EMI’s publishing assets, which includes the songwriting copyrights for more than a million compositions. The Universal Music Group, which offered $1.9 billion for EMI’s record label division, filed its papers on Feb. 17.
A representative of the Sony group, which among several others includes Mubadala, the investment arm of Abu Dhabi, confirmed the filing in a statement on Monday, saying that “the parties will continue to engage constructively with the commission and are confident that the transaction will be approved.”
Sony and Universal’s proposed deals for EMI — which in the United States are being reviewed by the Federal Communications Commission — face opposition from the Warner Music Group, which would be the only other major record company once EMI is absorbed, and also from independent music trade groups. Impala, a group in Brussels that represents indies, has been speaking out loudly against the mergers since they were announced, saying that it wants the deals blocked outright.
But most analysts and industry executives say the most likely outcome is that the commission will demand divestitures, particularly from Universal, which in some European countries would end up with more than 50 percent of the market. Sony is seen as facing less risk in the review process. It would essentially control the EMI Music Publishing catalog, but would have a minority stake in the company.
Sony’s 38 percent share in EMI would be split with the Michael Jackson estate, which is already its partner in Sony/ATV, the entity that controls the Beatles’ publishing. Sony has not said what its split with the Jackson estate would be. The other investors in Sony’s EMI bid are Jynwel Capital, from Malaysia; Blackstone’s GSO Capital Partners unit; and David Geffen.
After the filing, the commission will conduct an initial assessment, which could take several months, before clearing the deals or opening a more thorough review, which would also take several months.
Source: NY Times
