Universal Acquire EMI As Historic Deal Is Cleared

Both the European Commission and the US Federal Trade Commission have given the all-clear to the Universal Music Group's $1.9 billion acquisition EMI Group Ltd's recorded music division in a landmark moment for the music industry.

The announcements finally give closure to the split and sale of the embattled EMI, with the publishing rights purchased by a Sony/ATV led-consortium – a deal which was confirmed earlier this year. Both aspects of the company were sold last year, there was opposition from both anti-trust regulators and independent music stakeholders from around the world. The process has taken nearly 11 months.

As part of the deal Universal, who now hold an undisputed global market share as the biggest of the now-three major labels, have had to divest a number of EMI's assets. These concessions include artists on the Parlophone label, such as Coldplay and Gorillaz, but not the recordings of The Beatles. In Europe they will also sell labels such as Chrysalis, Virgin Classics, Ensign and Mute.

The deal officially brings an end to the UK major EMI being its own entity, and the label will undergo a major restructure as a result. Not long after the announcement, CEO Roger Faxon announced that he and CFO Ruth Prior would resign, effective Friday 28 September.

In an email to staff he said, “With that approval and the imminent clearance in America, as well as those already received from other regulators around the world, UMG has cleared the final hurdle in its quest to become the owner of EMI Music. So, we are now ready to close this chapter in the history of EMI. It now seems all but certain that in a week's time, on September 28th, UMG will finally take control of this great and historic business.”

He said that for most staff “very little will change,” but addressed employees working for parts of the group that will be sold on. They will be brought together as a separate unit, managed outside of the Universal structure – and it will be managed by a 'hold separate manager'.

“For those of you who are to be a part of UMG, you should look to Lucian [Grainge, UMG's CEO and Chairman] and his team for leadership. They fought hard for the right to lead you, and I am sure that they will be a proud and committed steward of EMI and its heritage. I know that in the coming days Lucian looks forward to sharing with each of you his plans and aspirations for the future of the combined business. 

“For those of you whose business remains on the journey to its ultimate ownership, I am certain that you will be well guided and led in these coming months as the search for a new home continues.

“No matter which direction our lives take us in the future, all of us will forever be a part of the EMI family.

“We have accomplished so much together, broken new ground, learned so much from each other, built lasting friendships and had a lot of fun along the way. Our dedication to our artists and our commitment to doing the right thing on their behalf has enriched us, and changed their lives - and those of millions of music fans around the world - forever. That is the legacy all of us carry with us, as we move on to the next chapter in our lives.”

Universal's Grainge told the LA Times, “It will enable us to continue to invest in more music, to create investment opportunities for the entire Universal group, it will give us the opportunity to work with entrepreneurs in different genres and it will give us a cushion through this crucial crossover period as we hurtle toward a primarily digital business.”

Exact details and specifics of the future of EMI and UMG are expected to emerge next week.