BMG Repays Full Ownership

German media giant Bertelsmann says the main reason its reporting record-breaking half-year revenues is the strategic acquisitions it’s made in the last 19 months, including taking full ownership of music rights group BMG. 

In March 2013 Bertelsmann paid an estimated $1.05 billion to buy out its joint-venture partner Kohlberg Kravis Roberts & Co., with plans to make BMG the fourth major music company.

Bertelsmann’s Corporate Investments division, of which BMG is a part, saw year-on-year revenues increase to euro 254 million in the first half of 2014. Corporate investments reported an increase in revenues to €254 million ($333.5 million) – beating last year’s record of euro 235 million ($308.6 million) and a net profit of euro 16 million ($21 million) – last year acquisition costs meant the division was down euro 10 million ($13.2 million).

“BMG continued its growth course during the reporting period, acquiring the music rights companies or catalogues of Talpa Music, Montana and Hal David, with numerous classics in their portfolios,” said Bertelsmann chief exec Thomas Rabe. “Today, BMG sees itself as a music rights company covering all categories of music rights. The music rights market is still fragmented. Alongside the large players, there are still many small catalogs, some of which are available.”

Rabe wouldn’t say if BMG had its sights on any particular acquisition target. Consolidated revenues across Bertelsmann’s operations increased by almost seven percent to euro 7.8 billion ($10.4 billion). Net earnings, which suffered from startup losses for new businesses and negative foreign exchange effects, were a little more than 1 billion euros ($1.33 billion), a shade higher than last year’s record-breaking euro 1.01 billion ($1.32 billion).