By now, you’ll have seen Friday’s announcements about the future of EMI, which is being split and sold off. Universal Music will buy the recorded music division for $1.9bn, while a consortium including Sony, the estate of Michael Jackson and David Geffen is paying $2.2bn for EMI’s publishing arm. That means Warner Music Group and Bertelsmann – both favourites at one point for the respective divisions – walk away from the bidding process with nothing. Although it’s still possible the winning bidders could too if regulators block the deal.
Indie consortium Impala has already made a menacing statement anticipating that the European authorities will block both deals.
Vivendi is taking on the regulatory risk for its acquisition according to the Wall Street Journal: if blocked by regulators, it will be responsible for finding another buyer.
Current EMI CEO Roger Faxon’s hopes that the recorded music and publishing divisions would be kept together have been dashed. In a memo to staff, he says this is “not because there was no one interested, but because at the critical moment the credit markets seized up. With credit spreads widening and little access to debt capital it became difficult for financial bidders to formulate compelling proposals at the right price.”