EC Approves Universal-BMG Deal

The European Commission has given the thumb’s up to Universal Music Group’s euro 1.63 billion (US$2.19 billion) purchase of BMG Music Publishing, leaving the indie labels to look at the fine print before deciding whether to challenge it.

Universal chairman and chief exec Doug Morris described the EC’s decision as "an historic moment," but the reaction from Brussels-based Impala was decidedly muted.

"We welcome the fact that this decision sends a clear message to all the majors that the ‘halcyon’ days of music mergers being simply waved through are well and truly over. We now need to examine the decision in detail to see what it actually means," said Michel Lambot, a member of the European indie organisation’s board and co-head of Belgium’s PIAS group.

The deal has been approved "subject to remedies," some of which Universal has already shown a willingness to carry out. But the independents will consider whether they feel those are an effective check on the market power of what will now be the world’s biggest music publisher.

UMG has already received clearance from the regulatory authorities in the United States and Australia.

The remedies include the Vivendi-owned company hiving off certain of its own publishing assets, including the Rondor UK and Zomba UK catalogs as well as the European rights to Zomba US.

However, Universal will retain the rights to represent these catalogs in the United States and the rest of the world outside Europe.

Universal president and chief ops officer Zach Horowitz said the company is looking forward to closing the deal as quickly as possible and focusing on the successful integration of the two businesses.

The combined company will operate under the Universal Music Publishing Group brand and be led by current chairman and chief exec David Renzer.

The combined company will have a roster that includes Mariah Carey, Paul Simon, Prince, Dave Grohl, Justin Timberlake, U2, Shania Twain, Christina Aguilera, Anastacia, The Killers, Franz Ferdinand, 50 Cent, Mary J. Blige, R. Kelly, and the catalogs of Elton John, Barry Manilow, Henry Mancini, Leonard Bernstein, and the Scorpions.