EU Waits For The Universal Compromise
Universal has persuaded the EU antitrust regulators to delay their ruling on the purchase of Bertelsmann Music Group because it needs more time to work out how to best defend the deal.
Vivendi, Universal’s parent company, has already hinted that it would be willing to offload some of the German company’s catalogue to help smooth things, and now it looks like it needs a little more time to work out how to best play that hand.
The European Commission has agreed and put back the decision day from April 27th to June 1st.
In November, French newspapers and the U.K.’s The Times reported Vivendi’s chief financial officer Jacques Espinasse saying the company would consider disposing of part of the euro 1.6 billion (US$2.09 billion) BMG catalogue.
Now the company probably wants more time to work out the best way to try to keep the bits it wants most.
It could be considered fair for Vivendi to ask for a delay. The commission didn’t announce it was opening an in-depth merger investigation until December 8, by which time most of its own officials had broken up for Christmas.
The French company would already have been short of time to prepare a detailed case in time for an April 27th decision.
A Vivendi statement said it had asked for the delay "to give the Commission sufficient time to consider properly the merits of the merger in what would otherwise be an overly aggressive timetable."
It also said, "We remain confident that the merger will be approved."
Running the deal past the EC should be the last hurdle as the U.S. Federal Trade Commission and Justice Department have already cleared it, but getting European approval may turn out to be a little harder.
The Commission is already under pressure to run a careful eye over the deal because the European court was very critical of the way it scrutinised the merger of Sony and BMG’s recorded music businesses and told it to take a second look.
The court said the regulators hadn’t done enough to show there was no monopoly in the recording industry before the deal or that there would not be one afterward.
Apart from examining whether the Universal-BMG deal creates a publishing monopoly, the Commission will also probe whether it’s likely to have "a negative impact" on the incomes of European writers.
The EU looks unlikely to block the deal but Universal seems to be expecting that it may demand Universal sell off part of the company it has acquired.