Reports Say Universal Could Sell Virgin Records To Get EU OK For EMI Deal
July 16, 2012 at 4:25 AM (PT)
Is UNIVERSAL MUSIC planning to sell VIRGIN RECORDS and EMI CLASSICS in order to get the EUROPEAN COMMISSION to approve its bid to take over EMI? Reports in several newspapers indicate that UNIVERSAL will propose the spin-offs, and possibly the sale of distribution rights to MUTE RECORDS, in order to allay concerns the EU has about undue concentration in the music business and gain approval for the $1.9 billion (£1.2 billion) deal.
UNIVERSAL executives will be meeting with the EUROPEAN COMMISSION in BRUSSELS this week to negotiate concessions to get the deal, already approved in JAPAN, approved. “There’s no question that we expect that these divestitures will erode some of the potential values and synergies,” analyst TUNA N. AMOBI of STANDARD AND POOR's EQUIY RESEARCH told the NEW YORK TIMES. “The only question is how much value will be eroded.”
A decision by the European body is expected by SEPTEMBER. Federal Trade Commission approval is also pending.