EMI's iconic recorded music business is set to be taken over by rival Universal after a £1.2 billion deal was agreed today.
The EMI division, home to Coldplay, Katy Perry, the Beatles and Pink Floyd, will become part of the world's biggest recording company, which is owned by France's Vivendi, and whose artists include Take That and the Rolling Stones.
EMI, which also owns the Abbey Road studios, was taken over by US bank Citigroup earlier this year after its private equity owner Terra Firma was unable to keep up with interest payments.
The sale of EMI's music publishing arm is due to be completed later, with a Sony-led consortium expected to land the business, which collects royalties from broadcasting of music on television and radio.
Lucian Grainge, chairman and chief executive of Universal, said: "This is an historic acquisition and an important step in preserving the legacy of EMI Music.
"For me, as an Englishman, EMI was the pre-eminent music company that I grew up with. Its artists and their music provided the soundtrack to my teenage years."
Universal has pledged to continue to promote EMI's various record labels, including Parlophone, Virgin Records and EMI Records, and retain the Abbey Road studios.
The deal is yet to be approved by regulators but it is understood that Universal hopes the deal will be waved through because music companies are under such immense pressure from internet downloads.
Terra Firma's takeover of EMI, which is also home to Kylie Minogue and Tinie Tempah, is widely seen as one of the worst-timed deals of the credit bubble, coming just before the crisis hit.
The deal left EMI, whose sales were already being squeezed, with crippling repayments on its £3 billion debts.
Citigroup, which financed the deal, took control of the company when Guy Hands' Terra Firma struggled to repay its debts.
Mr Hands tried unsuccessfully to sue Citi, claiming the bank had claimed other parties were interested to bump up the price.