Chris Ratcliffe/Bloomberg NewsThe Beatles greet visitors at EMI Music’s headquarters in London.
10:16 a.m. | Updated
Vivendi, the French media and telecommunications company, has agreed to acquire the recorded music division of the EMI Group for 1.2 billion pounds, or about $1.9 billion.
The agreement means that the EMI record label, whose artists include the Beatles and Coldplay, will be under the same corporate umbrella as the Universal Music Group, the world’s largest music company.
Vivendi is acquiring the EMI music division from Citigroup, which seized EMI from Terra Firma Capital Partners, a private equity firm controlled by the British financier Guy Hands, after Terra Firma failed to pay back loans to the bank.
In a statement on Friday, Jean-Bernard Lévy, the chief executive of Vivendi, said: “We are very proud to welcome EMI into the Vivendi family. We all respect the labels within EMI as well as the artists and employees who contribute to its success. They will find
within our group a safe, long-term home, headquartered in Europe.”
Vivendi said it would finance the acquisition from its existing credit lines. At the same time, Vivendi plans to sell 500 million euros worth of non-core Universal Music assets.
The agreement with Citigroup does not include the music publishing business of EMI, which has drawn interest from Sony/ATV Music Publishing and BMG Music Publishing, a joint venture of Bertelsmann and the private equity firm Kohlberg Kravis Roberts.
A person briefed on the Vivendi deal, who spoke on condition of anonymity, said Sony/ATV was poised to reach an agreement for the publishing business, though a deal would not be announced immediately.
“It looks like Sony/ATV, barring a last minute counterattack from Bertelsmann/KKR,’’ this person said.
The deal with Vivendi ends a drawn-out biding process. The EMI recording division had drawn interest from a variety of bidders, including Len Blavatnik, the owner of the Warner Music Group.
Under the agreement with Vivendi, Citigroup will maintain EMI’s pension liability, which had been one of the major points of contention in the talks with any bidder.
Allen Company and SJ Berwin advised Vivendi. Clifford Chance, Shearman Sterlingand Freshfields Bruckhaus Deringer
acted as legal advisers to Citi and EMI.
Article source: http://feeds.nytimes.com/click.phdo?i=84efb9b7e632efe95cccb9652b4181d3
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