In Order To Buy EMI, UMG Starts Spinning Off 'Assets'
First Item Sold: Fontana Distribution to INgrooves
March 2, 2012 at 11:08 AM (PT)
VIVENDI SA, looking to make it easier for regulators to approve its recent purchase of EMI MUSIC, has begun to spin off some UNIVERSAL MUSIC GROUP assets. The first order of business was the sale of its independent distribution arm, FONTANA, to INGROOVES.
BLOOMBERG reports VIVENDI CFO PHILIPPE CAPRON said the company "would look at selling 500 million euros ($666 million) worth of assets and plans to wrap up these divestments by the second half of 2012."
"We want to get this done by the time regulators give their verdict on the UNIVERSAL MUSIC and EMI transaction," CAPRON said.
At the time of the BLOOMBERG interview, CAPRON and CEO JEAN-BERNARD LEVY weren't specific about which "assets" were being targeted, but time is ticking with THE EUROPEAN COMMISSION planning an initial deadline of MARCH 23rd to rule on the deal, and the U.S. FEDERAL TRADE COMMISSION expected to rule in late 2012.
Let The Selling Begin: Fontana Gets Into INgrooves
Their silence didn't prevent news of the first divestiture, however, as INGROOVES has announced that it has acquired FONTANA DISTRIBUTION from UMG to create INGROOVES FONTANA. As part of the deal, INGROOVES FONTANA will continue to work with UMG's award-winning sales force in connection with the physical sales of the company's releases.
"Through this acquisition, we are now able to offer the independent music community a fully integrated physical and digital distribution marketing solution in NORTH AMERICA," MCDANIELS said. "We believe that a successful relationship between distributor and label is, at its root, a flexible structure with a transparent flow of information. By combining INGROOVES and FONTANA, we will be able to extend this philosophy into a comprehensive distribution operation that provides our collective client base with a larger sales force, more marketing resources and a one-stop global retail network that maximizes opportunities in this dynamic, challenging environment.
INGROOVES FONTANA will be run by INGROOVES Pres. DAVE ZIERLER and FONTANA Pres. RON SPAULDING. "DAVE and RON have both been extraordinarily successful over the past four years in their respective roles and have built great teams and solid relationships with labels and retailers," MCDANIELS added. "INGROOVES FONTANA will provide both leaders with a platform to continue their phenomenal growth and deliver superior services to our clients."
"INGROOVES' commitment to independent music is second to none," UMG Pres./COO ZACH HOROWITZ said. "The combination of INGROOVES and FONTANA creates one of the strongest, most innovative companies in the business today, uniquely positioned to superserve its distributed labels with some of the most sophisticated executive talent in this genre of music, cutting edge technology, and enhanced marketing services. As a minority owner of INGROOVES, we believe this new style of relationship with the independent community maximizes the potential of our investment and creates the single best home for independent labels."