EU Approves Sony Buyout Of BMG
September 16, 2008 at 5:27 AM (PT)
SONY won permission from the EUROPEAN COMMISSION on MONDAY to buy full ownership of SONY BMG reports REUTERS. SONY agreed in AUGUST to buy BERTELSMANN's 50% stake in their Joint venture for around $900 million.
SONY said at the time that BERTELSMANN would also get $300 million of the cash on SONY BMG's balance sheet, valuing the deal at around $1.2 billion.
The new music company -- the second-largest after VIVENDI unit UNIVERSAL -- will now be called SONY MUSIC ENTERTAINMENT INC. and become a wholly-owned subsidiary of SONY CORPORATION OF AMERICA.
Independent EUROPEAN music recording firms, which opposed the creation of SONY BMG in the first place in 2003 and pursued lengthy legal action against it, slammed the decision to clear SONY's buyout.
Their association IMPALA said in a statement it was "incredible that the Commission can take such a consequential decision without carrying out an in-depth investigation" and said small recording companies would find it hard to compete.
IMPALA said it was "awaiting the text of the EC's decision so that it can determine its course of action."