Universal begins EMI sell-off after EU waves through deal

UNIVERSAL Music’s sale of EMI assets will begin this week after the European Commission approved Universal’s £1.2bn takeover of the iconic record label but ordered that subsidiaries including Parlophone and EMI Classics are divested.

The two remaining major labels – Warner Music and Sony BMG – have already indicated their interest in the parts of EMI Universal was ordered to sell off to comply with European competition concerns.

A number of private equity firms are also interested in the labels, which are home to artists including Coldplay, Pink Floyd and Queen, and which make up more than 60 per cent of EMI’s European revenue.

Universal Music’s chief executive Lucian Grainge said the merger would achieve £100m in cost savings and that despite Warner lobbying against EMI’s sale, it would not have to offer a substantial premium to win EMI assets.

Universal’s historic purchase – which reduces the music industry’s “big four” record labels to a “big three”, was approved by both the European Commission and the US Federal Trade Commission on Friday, 10 months after the deal was originally announced.

Universal, which is owned by French group Vivendi, is now expected to pocket around £350m from the sale.