updated 03:10 pm EDT, Mon May 21, 2007
EMI Staves Off Warner
Major record label EMI announced today that it had been taken over by Terra Firma, a private equity group. The $4.7 billion deal would see the group receive official control but would leave the music publisher essentially intact, rather than splitting off some of its business as had been suspected by some experts. Terra Firma had reportedly won an intense bidding war as its deal posed the least risk. EMI is said to have welcomed a potential buyout after struggling with falling sales, which cut its most recent profit by 60 percent.
While the deal hasn't been finalized, the agreement effectively shuts out EMI's direct rival Warner Music from attempting a similar takeover that had loomed over EMI for the past seven years.
If completed, the deal will also likely prevent changes to the company's DRM-free music effort, which had been announced for iTunes in early April and was recently complemented by a similar announcement from Amazon this month. Warner head Edgar Bronfman has vehemently opposed any attempts to remove DRM from his own label's tracks and has famously attacked Apple's CEO Steve Jobs for suggesting the possibility in an open letter.
Warner Music opted against commenting on the deal, which some believed would have put an end to EMI's unrestricted music program.