The uncertainty over EMI’s future is over.
UMG have announced a sale of Parlophone plus extra bits to Warner for £487 million ($770m).
It’s a neat deal, one that avoids most monopoly pitfalls. It also recoups for Universal almost half its outlay on the EMI business.
But what becomes now of EMI Classics? Will Warner keep it or sell it on? Warner has shown very little interest in classics over the past decade.
UPDATE: Universal will retain the Virgin label, but not Virgin Classics. When I sought clarification, I was informed that ‘the European Commission’s approval of the purchase of EMI by Universal Music Group required that we divest the classical companies at EMI.’ That includes VC. V Sad.
FOR IMMEDIATE RELEASE
UNIVERSAL MUSIC GROUP (UMG) TO SELL PARLOPHONE LABEL GROUP (PLG)
TO WARNER MUSIC GROUP
TRANSACTION ENSURES HOME FOR PLG ARTISTS
Santa Monica, CA, Thursday, February 07, 2013 – Universal Music Group (UMG), the world’s leading music company, today announced that it has entered into a definitive agreement to sell Parlophone Label Group (PLG) to Warner Music Group for £487 million. This sale follows the approval of UMG’s acquisition of EMI Recorded Music by the European Commission in September 2012. The closing of the Parlophone transaction is expected to occur later this year, following employee consultations in certain jurisdictions and subject to various regulatory approvals. Additional financial terms were not disclosed.
“Following this transaction, we will continue with our global reinvestment program that is rebuilding EMI and ensuring that the company is able to reach its full potential,” stated Lucian Grainge, Chairman & CEO of UMG. “And we’re satisfied that our agreement with Warner Music will provide a home for PLG artists.”
The Parlophone Label Group is comprised of the Parlophone and Chrysalis labels, as well as EMI recorded music operations in Belgium, Czech Republic, Denmark, France, Norway, Portugal, Spain, Slovakia and Sweden. PLG’s artists include Air, Coldplay, Daft Punk, Danger Mouse, David Guetta and Iron Maiden, among many others.
Following its successful purchase of the company last year, UMG acquired such iconic EMI labels and domestic operations as Virgin, Capitol, Blue Note, Christian Music Group, Capitol Nashville, Canada, Australia, Italy, Holland, Germany, Switzerland, Austria, Japan and Latin America and South Africa, among others. Artists include such chart-topping superstars as The Beatles, Katy Perry, Emeli Sandé, Robbie Williams, Swedish House Mafia, The Beach Boys, Lady Antebellum, Herbert Grönemeyer, Norah Jones, Tiziano Ferro, Hikaru Utada, Vasco Rossi, Helene Fischer, Smashing Pumpkins, 30 Seconds to Mars, Yumi Matsutoya, Keith Urban, Frank Sinatra, Empire of The Sun and Corinne Bailey Rae, among many others.
UMG and Vivendi were advised by Goldman Sachs and Bank of America Merrill Lynch on financial matters, and SJ Berwin, Shearman & Sterling and Smiths Law on legal matters.