European Union approves Sony EMI merger
The European Union's antitrust regulators on Thursday approved Sony Corp.'s $2.2-billion acquisition of EMI's publishing business, which would create the world's largest music publishing group with rights to about 2 million songs including some by David Bowie, Stevie Wonder and others.
In exchange for the EU's blessing, Sony agreed to sell off several European-based assets that together would have accounted for less than 5% of the combined company's overall revenue, said several executives close to the discussions who did not want to be named because they were not authorized to speak publicly on the matter.
The merger calls for Sony's music publishing subsidiary, Sony/ATV, to administer the EMI catalog on behalf of a consortium of investors, including the Blackstone Group, the Mubadala Development Co., the estate of Michael Jackson, GSO Capital Partners and veteran music and movie mogul David Geffen. Sony itself would be a minority partner.
Geffen's involvement, his first major investment in an entertainment company since co-founding DreamWorks SKG in 1994 -- after a long and successful career in the music industry -- came in the nick of time last fall as Sony struggled to pull together financing for the deal. When Mubadala pulled back some of its investment in the pool weeks leading up to the final bidding for EMI, Geffen jumped into the breach in late October -- days before Sony's offer was due.
Sony still needs to gain the approval of U.S. antitrust regulators who, like the European Commission, must decide whether the deal restricts competition and hurts consumers. The Federal Trade Commission, which has taken the lead in investigating the EMI sale, has not commented on the matter.
Sony, in a statement, said, it "looks forward to successfully concluding the other regulatory review processes that are underway in other regions."
Martin Bandier, chairman and chief executive of Sony/ATV Music Publishing, said: “Having spent over 17 years of my professional life helping to build EMI Music Publishing, today is not only an important milestone on the path to final approval, but a very special day for me, personally.”
-- Alex Pham
Photo: Stevie Wonder, whose songs' publishing rights are with EMI, at the Hollywood Bowl in 2011. Credit: Lawrence K. Ho / Los Angeles Times