The recorded music division of iconic British music group EMI, home to the Beatles and Coldplay, was sold today to French-based media conglomerate Vivendi.
Universal Music Group, an arm of Vivendi and the world’s largest music company, announced an agreement with Citigroup today to purchase EMI Music for £1.2bn.
There are reports that the second half of EMI, the song publishing and song writing copyrights group, has been sold to Sony/ATV for £1.4bn, although it has not been formally confirmed by Sony/ATV or Citigroup.
EMI Music has been on the selling block since Citigroup acquired it from UK private equity group Terra Firma in February.
The sale puts a total price of £2.6bn on the whole group, the same amount Citigroup originally lent Terra Firma to buy EMI in 2007, for £4.2bn.
The most recent negotiations to sell EMI Music fell through when Len Blavatnik, the new owner of EMI’s US on-off suitor Warner Music, walked away from a £1.5bn deal in the beginning of November.
UMG quickly capitalized on the failure.
"This is a historic acquisition for UMG and an important step in preserving the legacy of EMI Music," said Lucian Grainge, chairman and chief executive of Universal Music Group.
Putting EMI back under the control of music groups, as opposed to a private equity group or a bank, ends four years of strife within EMI. Radiohead and the Rolling Stones left EMI in protest to the ownership of EMI by Terra Firma.
"UMG is committed to both preserving EMI's cultural heritage and artistic diversity and also investing in its artists and people to grow the company's assets for the future,” said Grainge.
Although the management board and the supervisory board of Vivendi, owner of UMG, have approved the transaction, competition authorities in the countries concerned have not approved the transaction.
Authorities are concerned that the deal could give Universal too large a market share in the recorded music business, which could hurt competition in the industry.
Sony/ATV is expected to make a formal announcement about the sale today.