Universal Wants to buy BMG

[garthsj]

Forgive me if this has already been posted .. I did do a search without success:

Universal set for music world domination

Staff and agencies

Wednesday September 6, 2006

Guardian Unlimited

Vivendi's Universal Music Group today agreed to buy BMG Music Publishing for €1.63bn (£1.1bn).

If approved by the EU competition authorities, the deal would make Universal, already the world's largest record company, the industry's biggest music publisher as well, ahead of EMI and Warner Music.

BMG Music Publishing owns the rights to more than 1m songs by recording artists such as Christina Aguilera, Robbie Williams and Coldplay, as well as classic hits by the Beach Boys, Barry Manilow and other entertainers.

"The acquisition of BMG Music Publishing is a unique opportunity to grow our music publishing business and enhance the value of Universal Music Group at a time when the music market is improving, supported by technological innovations and digital sales," Vivendi's chief executive, Jean Bernard Levy, said in a statement.

Bertelsmann's chief financial officer, Thomas Rabe, said the sale of the unit will help pay back the €4.5bn of debt raised to finance the repurchase of the 25% stake in the company, held by Groupe Bruxelles Lambert.

"This transaction underscores our continued commitment to the strategy of reducing debt," Mr Rabe said. "Bertelsmann remains fully committed to its recorded music business through its partnership with Sony, in Sony BMG Music Entertainment."

Other companies interested in buying BMG Music Publishing included Warner, which broke off merger talks with EMI earlier this year, and Viacom, the media giant owned by Sumner Redstone.

BMG Music Publishing generated €371m of revenue and €81m in profits in the year to December 31, 2005.

Music publishers make money by licensing songs for use in films, TV shows, CDs, ringtones and other media. The companies also collect performance fees when songs are played on the radio or in public venues, such as clubs.

Analysts said the European Court of First Instance's decision in July to annul the 2004 merger between record companies Sony Music and BMG Recorded Music will have little bearing on today's deal, as the publishing business does not directly affect consumers.

· SpiralFrog, a new online music service, today signed an agreement with EMI Music Publishing to authorise SpiralFrog's use of EMI's music catalogue for legal downloading in the US via its advertising-supported service.

The agreement follows SpiralFrog's deal with Universal Music Group announced last week, allowing SpiralFrog to offer free downloads of Universal's songs.

Guardian Unlimited © Guardian Newspapers Limited 2006

[Chuck Nessa]

This was posted earlier and I responded by pointing out this is BMG's "music publishing" wing, not the recordings.