UMG/EMI Merger Path Lined With Hurdles
Universal Music Group still has a few hurdles to clear before it can purchase EMI’s recorded music division. UMG said today (6/20) that the European Commission has responded to the proposed merger with a statement of objections.
When very large corporations merge it is not uncommon for regulators to ask them to sell off pieces or make other concessions to receive antitrust clearance.
Meanwhile, the $1.9 billion transaction is also under scrutiny in the US. According to Reuters, Universal Chairman Lucian Grainge and EMI CEO Roger Faxon, the top players in the deal, will appear Thurs., June 21 before an antitrust subcommittee to speak on behalf of the merger. Live Nation’s Irving Azoff is also scheduled to appear in support. Opposing the transaction in front of the subcommittee will be Warner’s Edgar Bronfman Jr., Martin Mills of the Beggars Group (4AD, Rough Trade Records, Matador Records, XL Recordings) and Gigi Sohn of the public advocacy group Public Knowledge. The subcommittee is holding these hearings despite the fact that is has no formal influence over federal antitrust regulators.
UMG, owned by Vivendi, is buying EMI’s recorded music unit from Citigroup, which broke apart the publishing and label divisions in order to sell them off. The European Commission has already approved Sony/ATV’s $2.2 billion purchase of EMI Music Publishing.
