Universal may need to make more concessions to buy EMI
By Sophie Mosca | Tuesday 04 September 2012
The acquisition of EMI’s record catalogue by Universal Music – a subsidiary of the French group Vivendi – may be approved by the European Commission, according to
Reuters, citing two informed sources. However, Universal will probably have to expand the concessions it proposed during the summer to obtain the green light.
The EU executive has reservations about the €1.5 billion merger, which concerns both the physical and digital recorded music markets. The deal would give Universal (which holds around 26.5% of the global market in this area) unprecedented control, making it twice as big as the number two player, Sony. In its statement of objections sent to Universal (see
Europolitics4458), the Commission pointed out that the merger would create problems on the digital market in 26 of the 29 countries of the European Economic Area and in 21 EEA countries on the physical market.
To address these concerns, Universal proposed to divest itself of prized labels like Parlophone, Mute Records (except for rights to the Beatles), Sanctuary and Chrysalis (without the Robbie Williams catalogue). It also proposed to sell EMI jazz (Blue Note) and classical music (Virgin Classics and EMI Classics) labels. Universal is also prepared to sell several subsidiaries in France, Belgium, Poland, Portugal and the Czech Republic, as well as the Greek subsidiary of Universal Music (4476). According to the sources, a market test showed that these divestments would concern the global market rather than being limited to the EU.
All the parties declined to comment. The Commission is set to announce its final decision on 27 September.