Sony set to buy EMI for $2.2 Billion with EU clearing

By Chris Burns/April 19, 2012 1:45 pm EST

The European Union has had competition regulators investigate and subsequently OK a plan this week to allow an investor group lead by Sony Corporation to purchase the music-publishing devision of EMI Group LTD. for a whopping $2.2 billion dollars. While this amount may seem strikingly low considering the recent purchase of the application Instagram by Facebook for $1 billion, it appears that the music market and the mobile market simply are not working on the same level at the moment. Those of you wondering where Michael Jackson (mentioned several times in the proceedings) comes in to all this are not alone – it's the Sony/ATV 50/50 joint venture between Sony and the estate of Michael Jackson that are purchasing EMI this week.

Of course the consortium that includes those listed above will still have to wait for regulators across the rest of the earth as well before their global buy-out will be able to take place. Australia, Brazil, and the USA still have to run their investigations. The consortium's two head names include several lower-tiered names like David Geffen, development company Mumbadala Development Co PCSC, the Blackstone Group's (BX) GSO Capital Partners LP, and Jynwel Capital Limited. Competition Commission Joaquin Almunia noted the following:

"Sony and Mubadala have offered to divest valuable and attractive catalogues containing bestselling titles as well as works of successful and promising authors. I am therefore satisfied that the competitive dynamics in the online music publishing business will be maintained so as to ensure consumer choice and cultural diversity." – Almunia

This agreement is conditional on Sony agreeing to the following measures:

–E.U. says Sony must sell assets worth EUR25 million to meet regulators' demands

–Sony to lose global rights of four music catalogs under E.U. decision

–Sony to divest works of 12 contemporary authors as part of E.U. ruling

–E.U. probe focused on online copyrights market

If approved across the earth, Sony/EMI will be the largest company in music publishing in the world. Warner Music and Impala have called for the deal to be blocked, of course, the deal giving Sony/EMI a 31% market share if approved.

[via WSJ]