* Universal concessions widened to include worldwide rights
* Bulk of EMI’s Parlophone label to be sold
* EU Commission’s decision due by Sept. 27
By Foo Yun Chee
BRUSSELS, Sept 3 (Reuters) – Universal Music Group will win
EU approval for its $1.9 billion purchase of EMI with its offer
to sell global rights to some of EMI’s most valuable record
labels and catalogues, two people familiar with the deal said on
Monday.
EMI’s seller, Citigroup Inc, had acquired EMI from
buyout group Terra Firma – which had defaulted on loans owed to
the investment bank – and the proposed deal will cement
Universal’s No.1 position in the European music industry.
Universal, owned by French group Vivendi SA,
proposed in July to meet anti-trust concerns by selling the bulk
of Parlophone, one of EMI’s most prized assets with star acts
such as Coldplay and Queen, EMI Chief Executive Officer Roger
Faxon told staff at the time.
Faxon’s remarks confirmed an earlier Reuters story on the
proposal, which does not include rights to The Beatles, one of
the biggest-selling bands of all time.
The package of concessions also included the divestment of
the Mute, Ensign and Chrysalis labels, as well as EMI Classics,
Virgin Classics and EMI units in France, Belgium, the Czech
Republic, Poland, Portugal, Sweden and Norway. It also includes
Universal brands Sanctuary, Co-Op and Universal’s Greek unit.
That offer, which referred only to European rights, was made
after the European Commission warned Universal its proposed deal
would impede competition and that the combined group would need
to cut its market share to below 40 percent.
Universal has since broadened the scope of the concessions
after a market test by the Commission, which acts as EU
competition regulator, showed rivals were not happy with the
focus on EU rights, one of the people said.
“The scope of the concessions is likely to be global rather
than limited to the EU,” said the person, who declined to be
identified because of the sensitivity of the matter.
GOOD DEAL
The European Commission declined comment. It has set a Sept.
27 deadline for its decision. Universal and Vivendi also
declined comment.
Vivendi Chief Financial Officer Philippe Capron said last
week the group still viewed the EMI buy as a good deal, even if
it had to make significant concessions such as selling 40 to 60
percent of EMI’s European catalogue to get the deal approved.
The EU executive allowed a Sony -led group to buy
EMI’s music publishing business in April after a pledge to sell
the worldwide publishing rights of artists including Robbie
Williams.
The U.S. Federal Trade Commission is also examining the
Universal-EMI deal. Competition regulators in Canada, Japan and
New Zealand have cleared the takeover.
The combined group would include a vast library of current
top-selling and legendary names including Jay-Z, Kanye West,
Katy Perry and Pink Floyd.
Sources have told Reuters that interested buyers of EMI
assets include BMG, the music publishing joint venture between
German media group Bertelsmann and private equity
group KKR, as well as Virgin Records founder Richard
Branson and Sony Music.
