European Commission approves takeover of EMI by Universal on condition that it sells subsidiaries including EMI Classics
The future of the EMI record label is looking increasingly secure, as the European Commission has approved its takeover by Universal. But as a condition of the agreement, Universal must sell off a number of EMI’s assets, including its classical music division.
EMI is currently in the hands of the Citigroup bank, who seized the company when its previous owner, Terra Firma, defaulted on the loans required to buy it. Citigroup has been in negotiations to sell the company to one of its main rivals in the record industry, Universal, a subsidiary of the French company Vivendi.
But the sale has attracted the attention of the EU, who are concerned that a takeover would stifle competition within the industry. The stipulation to sell off EMI assets is intended to bring the combined company down to 40% of the market within the European Union.
Universal has said that it has already been approached by a number of other companies with a view to acquiring the labels. EMI Classics is likely to be an attractive proposition, as it has a huge back catalogue of recordings that could potentially make sizable profits on the reissue market.
No mergers, splits or sell-offs are likely in the near future, however, as the takeover has still to be approved by the US Federal Trade Commission.