updated 11:05 am EDT, Fri September 21, 2012
European Commission approves Universal/EMI deal but requires concessions
The European Commission approved Universal Music's takeover of EMI Music, though it required some concessions. Universal agreed to divest nearly one third of EMI assets, including its Parlophone flagship music label in Europe. There are other stipulations, such as agreeing to a set of market controls that dictate how Universal handles contracts with digital music services.
Universal will also have to sell some of its own assets and divest a number of formerly independent labels and nine other EMI subsidiaries across Europe. Divestments include global rights to release music by artists on these labels, so EMI won't have the rights to release records by big names such as Coldplay, Pink Floyd, Kylie Minogue, and David Guetta. Universal will get to keep recording rights for The Beatles and Robbie Williams, however.
The European Commission said it made these conditions in order to keep Universal's market power and its potential effect on the digital music market in check, The New York Times reported.
The assets Universal must sell are expected to create about $450 million in annual revenue in Europe, though the global rights could add up to much more.
Universal's deal, originally valued at $1.9 billion, already met with governing body approval in Australia, Canada, Japan, and New Zealand, and is currently being reviewed in the US by the Federal Trade Commission.
Universal said it will also sell its Sanctuary label and Co-op Music, a label licensing business, and its shares in the Jazzland label and its Universal Greece subsidiary. It must sell these assets within six months, and cannot reacquire them.