Major Change For Sony-BMG?
Two weeks in advance of Sony-BMG releasing its 2007 figures, Financial Times Deutschland is reporting that Bertelsmann is trying to hive off its 50 percent share of the business.
The German media giant is declining to comment on the speculation but the paper says chief financial officer Thomas Rabe has met with at least two private equity companies to discuss a possible sale.
The joint venture agreement between Sony Corp and Bertelsmann started in 2004 and is up for renewal in August 2009, but many analysts see the selling of BMG Music Publishing to Universal as the first stage of the 178-year-old Gütersloh-based company’s withdrawal from the music business.
"We have to evaluate our business areas and, if necessary, take tough decisions," Bertelsmann CEO Hartmut Ostrowski told a gathering of top executives in December.
"It goes without saying that we will keep an especially close eye on operations whose business is shrinking. We need to develop new ideas and explore paths that no one has ever gone down before."
Ostrowski has adopted the mantle and mantra of former chief exec Gunter Thielen by pointing out that all Bertelsmann businesses need to achieve a 10 percent return on sales. In 2006 Sony-BMG produced an 8.6 percent return.