Sony declines to submit concessions to EC over proposed $2.3bn EMI Music Publishing buyout

Sony Corporation has turned down the chance to submit any concessions to competition regulators in the European Union over its proposed $2.3bn takeover of EMI Music Publishing.

Sony had until last Friday (October 19) to file concessions with the European Commission. Doing so would have indicated a willingness to alter the deal or make certain anti-competitive guarantees.

The EC’s merger website regarding the acquisition was not updated with any filings from Sony’s side before the deadline.

The EC will make a decision this Friday (October 26) as to whether it will launch a full-scale investigation into the deal. Sony Corp intends to acquire a further 60% in EMI Music Publishing, adding to its existing 30% stake-holding.

European Regulators are currently holding a preliminary review of the $2.3bn deal.

The likes of independent music trade body IMPALA have made official complaints to the EC over the buyout, arguing that it would see Sony gain “immense bargaining power to leverage both publishing and recorded music markets”.

The proposed $2.3bn deal values EMI Music Publishing at $4.75 billion.

In 2012, Sony Corp acquired approximately 30% of EMP as part of a consortium buyout from Citigroup (in the same deal, the Mubadala-led group acquired 60% of the company).

Since then, Sony Corp-owned Sony/ATV has acted as the global administrator of EMI, and counts EMP’s quarterly/annual performance in its own industry-facing market share figures.

When Sony Corp became a shareholder in the consortium structure which acquired EMI Music Publishing from Citibank in 2012, the European Commission enforced divestments – directly leading to offshoot acquisitions for the likes of BMG (Famous Music and Virgin Music). 

Sony Corp is also the owner of Sony Music Entertainment, the recorded music major based in New York and run by CEO Rob Stringer.

According to MBW’s analysis, Sony’s proposed takeover of EMI Music Publishing wouldn’t quite create the world’s biggest music rights-holder – a title which would remain Universal’s – but it would result in the globe’s biggest music publisher being owned by the same parent as the world’s second biggest recorded music rights-holder.

Sony Corp is currently attempting to spend $2.6bn buying the approximate 70% in EMP it doesn’t already own.

This $2.6bn spend is split across two separate deals: (i) with a Mubadala-led consortium ($2.3bn) for 60% of EMP; and (ii) with the Jackson Estate ($287.5m) for a further 10%.

Sony Corp’s music publishing catalog currently stretches to 2.16m songs. If EMI Music Publishing was fully owned by the company, that number would grow to 4.21m.

EMI Music Publishing generated revenue of $663 million, adjusted operating income of $181 million*, and adjusted EBITDA of $249 million* for the fiscal year ended March 31, 2018.Music Business Worldwide

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