European Commission backs Universal takeover of EMI

 

Coldplay, Kylie Minogue, David Bowie and other prestigious artists are set to leave EMI after Universal's £1.2 billion takeover was approved today on condition it sells several of the recording company's labels.

The deal was backed by the European Commission (EC), which had been concerned that Universal would become too powerful if it swallowed EMI whole, on the basis that it loses EMI's Parlophone label, home to Lily Allen, Blur and Pink Floyd.

Universal must also sell a number of other assets including Mute, home to The Ramones, as well as Chrysalis, home to Depeche Mode and Moby, and its 50% stake in the Now! That's What I Call Music compilation joint venture.

EMI, which also owns Virgin Records, EMI Records and the Abbey Road studios, was taken over by US bank Citigroup in 2011 after its private equity owner Terra Firma was unable to keep up with interest payments.

Universal, which is led by Londoner Lucian Grainge, has Rihanna and Cher on its books, as well as Elbow, Florence + The Machine, Jay-Z, Kanye West, Lady Gaga, Nelly Furtado and U2.

It is still in talks with the Federal Trade Commission (FTC) in the United States over the deal but added it was "confident of approval".

The group is expected to raise between 250 million euros (£200 million) and 300 million euros (£240 million) from the sale of Parlophone and other smaller labels.

Universal will retain more than two thirds of EMI on a global basis, keeping EMI artists such as Katy Perry, Robbie Williams, The Beatles and the Beach Boys, which is much more than previously speculated.

A statement from the group said: "We remain true to our vision - to invest in talent and grow the company to offer consumers more music and more choice, while furthering our support for new digital services and entrepreneurs."

The EC had concerns that the deal would have allowed Universal to significantly worsen the licensing terms it offers to digital platforms that sell music to consumers.

It was concerned that following the merger, Universal would enjoy excessive market power with its direct customers, who sell physical and digital recorded music at retail level.

In particular, the Commission focused its investigation on the markets where record companies license their music to digital retailers such as Apple and Spotify.

The EC found that the proposed transaction, as initially notified, would have increased Universal's size in a way that would likely have enabled it to impose higher prices and more onerous licensing terms on digital music providers.

EC vice-president in charge of competition policy Joaquin Almunia said: "Competition in the music business is crucial to preserve choice, cultural diversity and innovation.

"In this investigation, we have paid close attention to digital innovation, which is changing the way that people listen to music.

"The very significant commitments proposed by Universal will ensure that competition in the music industry is preserved and that European consumers continue to enjoy all its benefits."

The EC announcement follows earlier clearances in key markets such as Japan, Australia and Canada.

Following the EC decision, the FTC in the US also approved the deal with no remedial action or disposals required. The transaction will now proceed to completion.

A statement from Universal said: "Our investment in EMI will create more opportunities for new and established artists, expand music output and consumer choice, and support new digital services."

PA

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
Buddy DeFranco
people
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
filmIdris Elba responds to James Bond rumours on Twitter
Arts and Entertainment
Lena Headey as Cersei Lannister in Game of Thrones
film
News
i100
Sport
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
Say it with... lyrics: The power of song was never greater, according to our internet searches

Say it with... lyrics

The power of song was never greater, according to our internet searches
Professor Danielle George: On a mission to bring back the art of 'thinkering'

The joys of 'thinkering'

Professor Danielle George on why we have to nurture tomorrow's scientists today
Monique Roffey: The author on father figures, the nation's narcissism and New Year reflections

Monique Roffey interview

The author on father figures, the nation's narcissism and New Year reflections
Introducing my anti-heroes of 2014

Introducing my anti-heroes of 2014

Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones
DJ Taylor: Good taste? It's all a matter of timing...

Good taste? It's all a matter of timing...

It has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Olivia Jacobs & Ben Caplan: 'Ben thought the play was called 'Christian Love'. It was 'Christie in Love' - about a necrophiliac serial killer'

How we met

Olivia Jacobs and Ben Caplan
Bill Granger recipes: Our chef's breakfasts will revitalise you in time for the New Year

Bill Granger's healthy breakfasts

Our chef's healthy recipes are perfect if you've overindulged during the festive season
Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

Who does your club need in the transfer window?

Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

Michael Calvin's Last Word

From aliens at FA to yak’s milk in the Tour, here’s to 2015