EC APPROVES UMG-BMG PUBLISHING MERGER

As expected, the European Commission today approved Universal Music Group’s acquisition of BMG Music Publishing. The decision by the regulatory commission follows extensive consultation with all parties involved and a full investigation into the competitive effects of the acquisition.

UMG had already received clearance in the U.S. and Australia and final closure of the deal will take place shortly. Universal Music Publishing is now the largest company of its kind in the world.

“We are delighted that the European Commission has approved our acquisition of BMG Music Publishing,” stated UMG boss Doug Morris. “This is an historic moment for us as we combine the best creative and strategic assets of these two very accomplished publishing businesses.”

“The merging of Universal Music Publishing Group with BMG Music will create a publishing business that is even better suited to serve our songwriters, composers and business partners in this challenging marketplace,” commented UMG President/COO Zach Horowitz. “We now look forward to closing the deal as quickly as possible so that we can focus on the successful integration of both companies.”

As a result of the transaction, Universal Music Publishing Group will divest certain assets, including such catalogs as Rondor UK and Zomba UK, as well as the European rights to Zomba US. The company, however, will retain the rights to represent these catalogs in the United States and rest of the world outside of Europe.

Upon closure of the acquisition, the combined company will operate under the Universal Music Publishing Group brand and will be led by David Renzer, its current Chairman/CEO, based in L.A. and repoting to Horowitz.

The combined company will include a vast catalog that comprises some of the most important recordings in history, including Mariah Carey, Paul Simon, Prince, Ludacris, Dave Grohl, Justin Timberlake, Maroon 5, Michel Sardou, Juanes, U2, Shania Twain, Christina Aguilera, Anastasia, The Killers, Franz Ferdinand, 50 Cent, Mary J. Blige, R. Kelly, No Doubt, Gloria and Emilio Estefan, and the works of Elton John, Barry Manilow, Henry Mancini, Gilbert Becaud, Leonard Bernstein, The Scorpions, Puccini and Ravel, among many others.

Meanwhile, IMPALA, the European association of independent labels which forced the EC to reconsider the Sony BMG pairing, and solicited concessions from WMG if it acquired EMI, reiterates the right to examine this merger as well.

“IMPALA notes that the decision sends a clear message to all the majors that mergers without concessions will not be permitted. The independents will now assess the decision in detail to determine whether the remedies are an effective check on the market power of UniversalBMG—now the world's biggest record company and music publisher.

“IMPALA reserves the right to seek a reversal and stay of the decision on both procedural and substantive grounds if, after consultation with its members, it concludes the remedies are insufficient. The increased market power of UniversalBMG in publishing and recording raises serious concerns of both single and collective dominance and would have justified outright prohibition. The parties proposed remedies in an attempt to address the Commission's concerns.”

Said IMPALA Chairman and Beggars Banquet head Martin Mills: “The remedies proposed by UniversalBMG early on showed how concerned they were to avoid a full public list of complaints against the merger. We now need to check how far they go in dealing with the problems. It is vital that UniversalBMG’s excessive market power is curbed and we will compare this in detail with what we have agreed with Warner.”