$4.1bn EMI sale tipped: Sony and Universal share spoils

Nov 11, 2011
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$4.1bn EMI sale tipped: Sony and Universal share spoils

Music label EMI has apparently been split up and sold off in chunks to Universal Music and Sony Music, insiders claim, in a $4.1bn deal that will likely be announced by the end of the weekend. Universal will grab EMI's recorded-music group, spending $1.9bn in the process, the WSJ's sources reveal, while Sony will take the EMI music publishing group for a further $2.2bn. Assuming the deal does not fall through, Citigroup, current owners of EMI Group, is likely to exceed market estimates for the sale.

Analysts had expected EMI to fetch less than $4bn - Citigroup's asking price - in an attempt to get the label off its hands. Similarly unexpected are the two apparent winners: neither Universal nor Sony were seen as being the frontrunners to take the deal.

Even assuming things go through, however, Citigroup isn't expecting a quick resolution. Both buyers will have to do some logistical shuffling to satisfy regulators, with Universal Music expected to sell up to €500m ($682m) in assets - a process tipped to potentially take almost two years - in order to garner the necessary approval.

What each company intends to do with its new divisions remains uncertain. Sony has recently been discussing its "four screen" media strategy as a way to challenge Apple's ecosystem, something which will demand both strong hardware and content ecosystems. The EMI Music publishing group is likely to increase the strength of Sony's position on that front, giving it significant control over rights to much of today's music and a sizable back-catalog of tracks. Apple will not be able to ignore the deal, either, given it needs to negotiate with labels for content in the iTunes store.


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