Sony Corp’s takeover of EMI Music Publishing has today (October 26) been approved by European regulators without any alteration.
Sony is now clear to complete a $2.3bn deal which will approximately buy it a further 60% of EMP – adding to the 30% it already owns.
A $287.5m deal for the remaining 10% has already been agreed with the Jackson Estate.
Sony remained confident in the regulatory process, declining to offer any voluntary concessions to the EC ahead of its deadline.
The takeover allows Sony to double its publishing catalog of songs from 2.16m to 4.21m compositions, adding to its existing Sony/ATV repertoire.
In addition to EMP and Sony/ATV, 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 faced opposition from the likes of independent music group IMPALA over the $2.3bn deal. IMPALA lobbied EC regulators in a bid to stop the buyout going ahead.
Helen Smith, IMPALA¹s Executive Chair, commented: “This goes against the regulator¹s own precedents. In 2012, it ruled that divestments were required for Sony to become a minority shareholder. Now that Sony is acquiring 100% control of EMI, it is being given unconditional approval. This is inconsistent and simply doesn¹t stack up. It is a poor advert for European merger control and sends an alarming message to independent businesses in all sectors, not just music.”
Smith continued: “This is bad news for the music sector and the digital single market. Sony will have a near monopoly over the charts and the whole music value chain will lose out as a result. Songwriters, composers, independent labels and publishers, digital services, and of course music fans, will all be worse off. This decision has dealt a significant blow to innovation and cultural diversity in Europe.
“IMPALA will review this decision very carefully, and we expect others will too. This is simply too important to let go. It undermines eighteen years of robust merger control in the music sector.”
Sony will have known all-too-well that IMPALA has form in this area: in 2011, the group lodged complaints with the EC over Universal Music Group’s proposed acquisition of EMI Music.
UMG’s deal was cleared in 2012, but not before the major was forced by European regulators to divest Parlophone Label Group (PLG), later acquired by rival Warner.Warner then, in turn, agreed to divest over $100m in assets to the independent sector.
When Sony 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). Music Business Worldwide