And then there were three. The days of the four major labels dominating the music scene worldwide are over with Citigroup announcing this morning that they have secured the sale of subsidiary EMI, splitting the group in half.
Vivendi and its subsidiary, Universal Music Group, have signed a definitive agreement to purchase EMI’s recorded music division for a total consideration of US$1.9 billion.
Whilst an investor group comprised of Sony Corporation of America, in conjunction with the Estate of Michael Jackson; Mubadala Development Company PJSC; Jynwel Capital Limited; the Blackstone Group’s GSO Capital Partners LP; and David Geffen, announced today the execution of a definitive agreement, whereby the group will acquire EMI Music Publishing for US$2.2 billion.
Following the acquisition, Sony/ATV Music Publishing will help oversee EMI Music Publishing on behalf of the group. Sony/ATV Music Publishing is co-owned by subsidiaries of Sony America and trusts formed by the Estate of Michael Jackson.
EMI Group was one of the world’s most prominent music companies, possessing a rich musical legacy. Its recorded music division, EMI Music, operates around the world and represents artists spanning all musical tastes and genres through record labels including Angel, Astralwerks, Blue Note, Capitol, Capitol Latin, Capitol Records Nashville, EMI Classics, EMI CMG, EMI Records, EMI Records Nashville, Manhattan, Parlophone, Virgin Classics and Virgin Records.
Lucian Grainge, Chairman & CEO of Universal Music Group, said of the acquisition, “This is a historic acquisition for UMG and an important step in preserving the legacy of EMI Music. For me, as an Englishman, EMI was the preeminent music company that I grew up with. Its artists and their music provided the soundtrack to my teenage years.
The sale brings to a close the ongoing saga at the beleaguered record company, who was purchased by Guy Hands and his investment group Terra Firma for $6 Billion in 2007. Since then the record label has been bleeding money like a stuck pig and Terra Firma was unable to continue to pay for the loans it secured to purchase the group. As a result the investment group defaulted and the label ended up in the hands of Citigroup who have been trying to offload it ever since.
There was talk that Russian billionaire Len Blavatnik may have been interested in EMI with the idea of merging the label with rival Warner Music which the cowboy investor has been trying to purchase.
The split of the two divisions of EMI is also contrary to statements by Citigroup CEO Roger Faxon who said in an interview in April “I have no doubt that the best possible way to yield the highest value for EMI is to keep our businesses together in pursuit of our strategy. As we move forward that will become evident even to the most sceptical observer. This is why I have every confidence that EMI will remain EMI for a very, very long time to come.”