Universal meets with European Commission to discuss EMI merger

By , Jul 16 2012

This week, Universal Music Group officials will meet with European Commission members to discuss its $1.9 billion bid for the recorded music operations of the EMI Group.

Universal bought EMI from Citigroup last year, and if approved by US and European regulators, the company would have a market share of around 40 percent, a number troubling to regulators on both sides of the Atlantic.

Universal assumed all risk in the deal, agreeing to pay more than 80 percent of the purchase price by September, whether the deal moves forward or not. To make the merger more palatable to regulators, Universal might have to divest so many assets that the deal is no longer favorable.

According to the New York Times, Universal is likely to divest Virgin Records and EMI Classics, and possibly spin off distribution of Mute Records.

Universal’s curious claim that online piracy would act as a control over the massive company has not satisfied regulators. They must propose remedies by Wednesday; the European Commission’s deadline to decide is Sept 6, with an Federal Trade Commission ruling expected in the coming weeks.

Previously, EMI sold its music publishing holdings to a group led by Sony for $2.2 billion. EMI, the only UK-based member of the former “Big Four” record companies, was founded in 1931.

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