Universal May Get Quick Decision

Universal Music Group may have to wait until only March 23 to find out if the European Commission will allow its $1.9 billion purchase of EMI’s recorded music business.

That’s the date the EC is expected to make its initial ruling, but that’s highly unlikely to be the end of the matter.

If the Sony-BMG merger is a guideline, EMI’s future could occupy the European courts for at least three years.

Whatever the Commission’s decision, one faction or another will be dissatisfied with the outcome and likely launch an appeal.

The EC may even decide to submit the transaction to a more rigorous “phase two” inquiry, likely leaving the issue unresolved before the end of the year.

The decision will hinge on whether the EC, Europe’s regulatory authority, feels a combined Universal-EMI would have too great a share of the market.

That may depend on which set of figures it accepts. Opponents of the deal suggest the new setup would have about 45 percent of the pie, but Universal says that includes product it distributes for other record labels.

The Vivendi-owned company will also argue that EMI didn’t have a viable long-term future as a standalone business, and that being swallowed up by the French media giant’s music operation is better than letting EMI go under.

Warner Music, now owned by Len Blavatnik’s Access Industries, would likely challenge that view.

The WMG has long hoped to buy EMI, but was one of the under-bidders in last year’s auction.

Universal is said to favour keeping EMI as a separate entity, provided company boss Lucian Grainge can find a suitable chief exec.

Last year, U.S. bank Citigroup seized control of EMI because Guy Hands’ Terra Firma couldn’t service its debt on loans it needed to buy the company in 2007.