French media house Vivendi SA (VIVEF.PK,VIV.L) and its subsidiary Universal Music Group, or UMG, Thursday announced a definitive agreement to sell Parlophone Label Group, a unit of EMI Recorded Music, to Warner Music Group for 487 million pounds ($766 million) in cash.
Universal was asked by regulators to sell some labels for clearing its $1.9 billion purchase of EMI last year. It was speculated that around a dozen groups were seeking to buy Parlophone, the British label that includes artists from Coldplay to Kylie Minogue.
UK-based EMI is one of the world's largest music companies, and comprised of Music Publishing and Recorded Music divisions. Once a constituent of the FTSE 100 Index, EMI was taken over by Citigroup Inc. (C) in February 2011 from private equity group Terra Firma Capital Partners, after EMI piled up debts of over $4 billion.
In November 2011, Citi agreed to sell EMI's Recorded Music division to Vivendi and its subsidiary Universal Music Group for 1.2 billion pounds. The European commission at that time wanted Universal to sell the rights to distribute some recent music from its active roster.
Vivendi said Thursday that the sale represents the main part of the application of the regulatory undertakings to the European Commission.
The acquisition of EMI Recorded Music reinforces UMG's position as the world's largest major with a market share of about 30 percent. UMG will enlarge its presence in some sixty countries, particularly in the three main international music markets - the U.S., Japan and Germany. The deal also strengthens its availability on all digital platforms.
Commenting on the agreement, Jean-François Dubos, Chairman of the Management Board of Vivendi, said: "The acquisition of EMI Recorded Music is a major milestone for Vivendi. It significantly strengthens its ownership of exclusive music content and fosters the development of talent, while continuing to promote cultural diversity."
Vivendi stock closed lower by 1.4 pecent at 15.44 euros on a volume of 3.03 million shares.
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