Universal Music Group (UMG) has signed an agreement to buy EMI’s recorded music division for £1.2 billion. ($AUD1.8 billion, $US1.9 billion).
The sale will see all of EMI’s labels including Angel, Astralwerks, Blue Note, Capitol, Capitol Latin, Capitol Records Nashville, EMI Classics, EMI CMG, EMI Records, EMI Records Nashville, Manhattan, Parlophone, Virgin Classics and Virgin Records will move to Universal worldwide.
That includes the world’s most prestigious catalogue from The Beatles.
EMI artists also include Coldplay, Katy Perry, Pink Floyd, Beach Boys, Norah Jones and Lady Antebellum.
EMI’s recording division and publishing division was sold to private equity group Terra Firm in 2007 for £4.2 billion. To fund the purchase, Terra Firma, under the leadership of Guy Hands, borrowed £2.6 billion from Citigroup before the Global Financial meltdown later that year.
Terra Firma defaulted on its loan payments and Citigroup foreclosed. Terra Firma claimed it was tricked into paying an inflated price for the company. The case was thrown out of court and Citigroup took ownership of EMI in February this year.
Universal was already the biggest music company in the world. The sale of EMI means that there are now only three major record companies – Universal, Sony and Warner.
EMI’s publishing division was sold separately to Sony/ATV Music Publishing for $2.2 billion. All up, both divisions were sold for a total of $US4.1 billion
Jean-Bernard Lévy, CEO of Vivendi, stated: “We are very proud to welcome EMI into the Vivendi family. We all respect the labels within EMI as well as the artists and employees who contribute to its success. They will find within our Group a safe, long-term home, headquartered in Europe.” He then added: “We plan to acquire EMI’s recorded music division on attractive terms, adhering to our principle of total financial discipline. We are confident that we will be able to create additional value for our shareholders thanks to our knowledge of the industry and our proven track record of successful integration. Lucian Grainge’s personal experience and heritage will be a major asset in making the combined entity a great success.”
Lucian Grainge, Chairman & CEO of Universal Music Group, added: “This is a historic acquisition for UMG and an important step in preserving the legacy of EMI Music. For me, as an Englishman, EMI was the preeminent music company that I grew up with. Its artists and their music provided the soundtrack to my teenage years. Therefore, 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. As a result, we will be better positioned to fully capitalize on the many new and exciting opportunities in the current marketplace, and also able to better serve our artists, songwriters and business partners, while offering fans even more choice.”
Stephen Volk, Chairman of the Board of EMI Group and Vice Chairman of Citigroup, added: “We believe that this transaction accomplishes Citi’s objective of maximizing the value of EMI, giving EMI Music a partner in Universal Music that appreciates EMI’s rich cultural legacy, its incredible stable of musical talent, and its employees who work so hard to deliver successful outcomes for the artists they represent. We are grateful to Roger Faxon, his management team and all of EMI’s staff for the continued success of this business during Citi’s ownership.”