Sony Buys Bertelsmann's 50% Stake In Sony BMG
August 5, 2008 at 7:19 AM (PT)
SONY CORPORATION and BERTELSMANN AG TODAY announced that SONY has agreed to acquire BERTELSMANN's 50% stake in SONY BMG. The music company, to be called SONY MUSIC ENTERTAINMENT INC., will become a wholly-owned subsidiary of SONY CORPORATION OF AMERICA. SONY and BERTELSMANN AG originally created the SONY BMG joint venture in AUGUST 2004. The deal is said to be valued at $1.2 billion.
"Music has been a vital and vibrant part of SONY's culture for over 20 years. This acquisition will allow us to achieve a deeper and more robust integration between the wide-ranging global assets of the music company and SONY's products, operating companies and affiliates. It enables us to offer a total entertainment experience to consumers," said SONY CORP. CEO SIR HOWARD STRINGER. "Over the past four years, SONY BMG has undertaken a very successful restructuring, streamlined operations and developed innovative digital partnerships that ensure it will continue to be a leader in the creation and distribution of music worldwide. It is an organization rich in talent, ideas and enthusiasm, and is a strong fit with our overall business strategy."
Music has been a vital and vibrant part of Sony's culture for over 20 years. This acquisition will allow us to achieve a deeper and more robust integration between the wide-ranging global assets of the music company and Sony's products.
"After a careful and thorough review, we made the strategic decision to sell our investment in this joint venture to SONY, a step that we believe will benefit the stakeholders of both our companies," stated BERTELSMANN AG CEO HARTMUT OSTROWSKI. "This move is consistent with our new growth strategy and will enable us to focus on our defined growth areas. SONY has been an excellent partner, and they are the right company to take this business to the next step and ensure that it realizes its full value and potential. We look forward to witnessing SONY MUSIC ENTERTAINMENT's exciting future under SONY's ownership."
Once the transaction is completed, SONY MUSIC ENTERTAINMENT INC. will be comprised of premier music labels such as: ARISTA RECORDS, COLUMBIA RECORDS, EPIC RECORDS, J RECORDS, JIVE RECORDS, RCA RECORDS and ZOMBA. Key recording artists will include CELINE DION, ALICIA KEYS, YO-YO MA, BRUCE SPRINGSTEEN, JUSTIN TIMBERLAKE, USHER and JAY CHOU.
As part of the transaction, the parties have also agreed to continue to share the company's manufacturing and distribution requirements between SONY's manufacturing subsidiary, SONY DADC, and BERTELSMANN's services company, ARVATO DIGITAL SERVICES GMBH, by extending the agreements with ARVATO for additional terms of up to six years. In addition, BERTELSMANN will be taking over selected European music catalog assets from SONY BMG.
The New Label Structure
ALL ACCESS has learned that SONY MUSIC ENTERTAINMENT will be comprised of four seperate labels under two group heads, who report to ROLF SCHMIDT-HOLTZ:
ROB STRINGER oversees COLUMBIA/EPIC
BARRY WEISS will run RCA MUSIC GROUP/ZOMBA-JIVE
More details, soon.