Universal wins EU approval for EMI buy, must sell assets

BRUSSELS (Reuters) - Vivendi's Universal Music Group clinched EU regulatory approval on Friday to buy EMI's recorded music unit for $1.9 billion after agreeing to sell record labels that bring in nearly a third of the British company's revenues.

The combined group, which would include a vast library of current top-selling and legendary names including Jay-Z, Kanye West, Katy Perry and Pink Floyd, proposed the asset sales after EU regulators raised concerns over the potential market power of the combined group.

Universal said the assets to be sold amounted to 30 percent of EMI's group revenues or roughly 10 percent of sales for the combined group.

It will sell Parlophone, one of EMI's most prized labels with star acts such as Coldplay and Queen. The Beatles will not be included in the disposals.

Also on the block will be the Mute, Ensign and Chrysalis labels, EMI Classics, Virgin Classics, EMI's share of the "NOW! That's what I call music" compilation business, and EMI units in France, Spain, Belgium, Denmark, the Czech Republic, Poland, Portugal, Sweden and Norway.

Universal will also sell its brands Sanctuary, Co-Op Music Ltd, King Island Roxystar, MPS Records, its share in Jazzland, and its Greek unit.

Reuters reported on September 3 that the EU watchdog would clear the takeover after Universal offered to sell global rights to some of EMI's record labels and catalogues.

Industry experts said the value of the package could be as high as $750 million.

The European Commission said buyers must be active record firms or those with a proven track record in the music industry, ensuring that there would be a strong rival to Universal.

Potential buyers include Warner Music Group, BMG - which is the music publishing joint venture between German media group Bertelsmann and private equity group KKR, as well as Virgin Records founder Richard Branson and Sony 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," EU Competition Commissioner Joaquin Almunia said in a statement.

EMI's seller, Citigroup Inc, acquired EMI from buyout group Terra Firma when it defaulted on loans owed to the investment bank. The proposed deal will cement Universal's No. 1 position in the European music industry.

(Reporting by Foo Yun Chee; editing by Rex Merrifield)

Source: http://news.yahoo.com/universal-wins-eu-approval-emi-buy-must-sell-094608856--sector.html

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