Tags: Universal | Sony | Music | EMI

Universal, Sony to Buy Music Label EMI for $4.1 Billion

Monday, 14 Nov 2011 07:27 AM

Vivendi's Universal Music Group and Sony won the auction for EMI's recorded music and music publishing operations Friday, trumping bids by archrivals Warner Music Group and BMG Music Publishing at the 11th hour.

Universal said it would buy EMI's recorded-music unit for $1.9 billion, while two people familiar with the matter said a consortium led by Sony was expected to buy the publishing operation of the British music company for $2.2 billion.

Despite Warner Music dropping out, Universal raised its bid for EMI's record label division, which houses such acts as Coldplay, the Beastie Boys and Katy Perry.

"(We will) replenish and rebuild the rosters that have lacked the level of investment that frankly a business like this should have had. EMI is not a utility company," Lucian Grainge, head of Universal, told reporters on a conference call.

"We plan to acquire EMI's recorded music division on attractive terms, adhering to our principle of total financial discipline," Vivendi Chief Executive Jean-Bernard Levy said in a statement.

The division will change hands for 7 times earnings before interest, tax, depreciation and amortization (EBITDA) excluding synergies, Vivendi said in a statement.

This means EMI owner Citigroup Inc will reap a better-than-expected $4.1 billion from the two deals. Citigroup had to write off debt to EMI when it snatched the company from Guy Hands' buyout house Terra Firma in February after the firm defaulted on a loan.

Warner Music led the bidding on the recorded music side, while KKR-backed BMG was ahead on the song catalog side as recently as last week. But in a surprise, Warner Music walked away from the auction after failing to agree to terms for taking over EMI's pension liabilities.


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Vivendi's Universal Music Group and Sony won the auction for EMI's recorded music and music publishing operations Friday, trumping bids by archrivals Warner Music Group and BMG Music Publishing at the 11th hour. Universal said it would buy EMI's recorded-music unit for...
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2011-27-14
Monday, 14 Nov 2011 07:27 AM
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