BMG Close To KKR Deal
Bertelsmann is reportedly so close to buying out partner KKR that an announcement could be made at the company’s earnings call in Berlin March 26.
There’s been no official announcement from the German media giant beyond what Thomas Hesse, the board member for corporate development, recently told Süddeutsche Zeitung.
“It is our ambition that the music business will again become a significant business for Bertelsmann,” he said. “With KKR we have a very good partnership. Over the long term the constellation will change. We will find a good solution.”
Speculation that all wasn’t well between Bertelsmann and one of the world’s leading investment firms first surfaced three months ago in the New York Post.
The UK’s Financial Times has also said the Bertelsmann-KKR relationship is heading for the rocks.
Apparently the two parties are at loggerheads over how far the partnership should go to acquire high-tag music companies, a situation that was exacerbated by its failure to get hold of major EMI labels such as Parlophone.
It had also come up short when EMI itself was sold to Universal.
The only business Bertelsmann Music Group has picked up from the disposal of assets the European Commission forced on Universal is Sanctuary.
Sanctuary cost £40 million and is home to Iron Maiden, Black Sabbath and Motörhead, but is quite the small fry compared to Parlophone, whose roster includes Coldplay, Kylie Minogue, Daft Punk, Danger Mouse, David Guetta and Iron Maiden.
Warner paid £487 million for Parlophone.
Bertelsmann and KKR founded BMG Rights Management in 2008. It’s since bought other publishing houses including Cherry Lane, Evergreen, Chrysalis and Bug.