Anatomy Of The Historic EMI Sale: A Timeline

25 September 2012 | 2:59 pm | Scott Fitzsimons

18 months of corporate maneuvering appears to be finalised

The final clearance for EMI Music's sale to the Universal Music Group and Sony/ATV marks a sort of finale for two hectic years for the majors. The embattled EMI emerged from a 'disastrous' tenure under Terra Firma to be under the control of Citibank, while Warner Music Group was also on the market. With potential buyers watching both sales, particularly the bluffs and advances of other interested parties, it made for fascinating corporate maneuvering and reporting.

This is a basic timeline of theMusic.com.au and Your Daily SPA's reporting of the saga, right from the initial reports on our previous site through to last weekend's confirmation.

24 Feb, 2011
The bidding war for Warner began, with EMI – now under the control of Citibank – biding its time. There was a strong possibility then that Warner and EMI would be bought by the same buyer and merged.

1 March, 2011
A Billboard report suggested than ten main offers for Warner had been made, including Sony/ATV and former director Len Blavatnik. Universal pulled out due to concerns over antitrust laws they'd have to overcome.

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10 March, 2011
Lucian Grainge was appointed the new Universal Music Group Chairman, which was perceived to be warmly received by artists in the industry. He added the title to his existing role of CEO.

24 March, 2011
After being named in the top five through the first round of bidding, BMG – flirting with a return to music – restructured their initial bid for Warner and appeared as a frontrunner. BMG looked at a $2.8 billion deal, with notions of selling off sections they don't want to other parties - probably Universal and Sony.

1 April, 2011
The Wall Street Journal reported that a new surprise Live Nation bid surfaced in fight for Warner's assets.

12 April, 2011
The second round bidding for Warner took place, with new potential buyers surfacing. The EMI sale thought to be waiting until Warner is sorted before making a sale, although it was reported that bids had been made.

6 May, 2011
Russian tycoon Len Blavatnik, a part owner in Warner, looked certain to win the company.

9 May, 2011
Len Blavatnik's private equity firm Access Industries won the Warner bid, with a $3.3 billion cash acquisition. All eyes turned to EMI as it was expected Blavatnik would make a swoop for that as well.

21 June, 2011
EMI was officially placed on the market by Citibank, who had been in control of the company for most of the year. Rumours still strong that Blavatnik was determined to merge the UK major with Warner.

23 June, 2011
First reports that Universal would make a strong play for EMI. After missing out on Warner (Len Blavatnik's offer to keep the company together was more desirable than Universal's intention to split it, it emerged) the world's biggest major was making noises to indicate they intended to stay at the top.

29 June, 2011
Nearly all the companies who were interested in Warner were now vying for EMI. Blavatnik's Access Industries would push for a merger, UMG would look to buy EMI's recorded music operations to merge with their own and Sony/ATV were thought to be interested in the publishing division.

17 Oct, 2011
Despite that flurry of interest, by October EMI and Citibank were still struggling to attract the price they wanted amidst financial uncertainties. It was believed that US doubts and the Eurozone crisis had scared some of the previous potential buyers off. Bids from $1 billion to $1.3 billion had been received from Warner, Universal and MacAndrews & Forbes for the recording division, with Sony and BMG looking at the publishing division for somewhere between $1.75 billion to $2 billion. At this point splitting the company would be the most lucrative option, with a combined price of $4 billion.

28 Oct, 2011
Edging closer to a split-and-sale, with Warner expected to buy recording wing for approximately $1.5 billion, and BMG to beat Sony/ATV to the publishing right with a bid of approximately $2 billion. Universal seemed to pull out of the race for the recorded music, finding pension liabilities a stumbling block.

31 Oct, 2011
Dramatically, Len Blavatnik and Warner stepped away from their bid for EMI recording as Citibank tried to leverage more than the approximate $1.5 billion offered. This would affect BMG's bid for publishing also, with Citibank wanting to sell all of EMI, or none of it. Blavatnik was thought to be bluffing.

10 Nov, 2011
With Warner walking away, Universal came back into the picture as the frontrunner. Citibank seemed more lenient on pension liabilities and regulatory risk, which was now also a stumbling block for Blavatnik. Citibank had asked for $1.7 billion for the recording sector, with the publishing sector believed to be worth $2 million. A new source says Sony/ATV had now offered the leading bid with BMG not far behind. At the same time Independent Music Companies Association IMPALA called on the European Commission to intervene on the organisation's behalf if Sony or Universal were to win the bid, believing the duopoly would hinder the music industry.

14 Nov, 2011
The deal was confirmed: Universal won the EMI's recorded music division with a $1.9 billion bid and the Sony/ATV-led consortium won the publishing division with $2.2 billion bid. Neither BMG or Warner were prepared to pay Citibank's price. The sale ends 80 years of independence of EMI and Universal were likely to sell $500 million of non-core assets to smooth the deal past regulators.

15 Nov, 2011
EMI CEO Roger Faxon addresses staff: Clearly you're going to have lots of questions, many of which I may not be able to answer just yet. But I commit to you that my teams and I will be in regular contact, and will aim to answer all of your questions to the best of our abilities. As the process continues, I will ensure that we update you every step of the way.”

6 Dec, 2011
The expected news of Warner Music's Chairman Edgar M. Bronfman Jr's resignation was announced, and effective from January 2012. It had long been Bronfman's goal to see the merge of EMI and Warner and that was now out of reach. He had stayed on after Blavatnik's purchase to try and bring the merger to life.

20 Jan, 2012
The sale of EMI was sparking fierce opposition from Independent labels. IMPALA called upon the European Commission to intervene and an association of UK independent music labels (AIM) were asking members to sign and send a letter to their local MP. The belief is that the sale would result in market concentration and a monopolistic position, which would cause market decline. Even Warner hired a law firm to lobby against the sale.

21 Feb, 2012
Amidst of opposition from Independent groups and Warner, Universal asked the European Union regulators to approve the sale of EMI and in a statement said they “remain confident of securing clearance”.

18 April, 2012
The New York Times comes across a Sony report planning the cut of 60 percent of EMI publishing staff over the next two years.

19 April, 2012
Sony/ATV's $2.2 billion purchase of EMI's publishing arm gets the green light from the European Commission in Brussels in a swift decision that took a few by surprise. In response to job cuts, Sony/ATV's CEO said “The exact numbers or percentages are not final.”

14 May, 2012
Another hurdle was faced by Universal in their bid, which is now proving to be far more difficult than planned, with an American Senate panel set to hold a hearing regarding the $1.9 billion purchase. Universal stated, “We remain confident of regulatory approval.”

24 May, 2012
EMI exec Bart Cools opened up on the takeover to theMusic.com.au, which he said the staff appeared resigned to and described as a “healthy acquisition”. The Executive Vice President for Marketing In Europe said he was quietly confident the brand will thrive in the wake of the takeover. “Universal didn't buy this to destroy it, obviously. There is a sort of worry, but not too much. We're doing well, we're developing nicely, we do what we have to do.”

21 June, 2012
Tensions began to mount prior to the American Senate Judicial hearing that was taking place that week. Stakeholders were upping the ante on their lobbying and spending ahead of the regulatory decision. Warner were believed to have increased their lobbying spend from $100,000 to $360,000 in 2012's first quarter. Universal were also believed to have hired lobbying firm Capitol Hill Strategies which also employs Paul Bock, a former chief of staff to the chairman of the subcommittee holding the hearing.

22 June, 2012
The New Zealand Commerce Commission gave the all clear for Universal Music Group's takeover of EMI's recorded music. The Commission's Chair Mark Berry says the deal is: “unlikely to substantially lessen competition in any of the affected markets" as market competition would still be felt from other major and independent record labels.

25 June, 2012
Independent Music New Zealand [IMNZ] expressed “disappointment” in NZ Commerce Commission's decision to give the green light to the acquisition. IMNZ released a statement saying the merge would present “detrimental ways of exploiting increased market power” resulting in market dominance. Despite the Commission assuring there would still remain market competition, IMNZ calls fellow international independents to block the proposal.

30 June, 2012
Sony/ATV finalised the deal to purchase the publishing division of EMI – giving them control over the 750,000 tracks on the Sony/ATV roster and EMI's 1.3 million tracks. They essentially become the biggest publishing company in the world.

5 July, 2012
The European Commission gave Universal a two-day extension to respond to a 194-page statement of objections to their acquisition of EMI sent last month. The Commission had been assessing the purchase since February. Tension is rising once again as it believed that Universal have guaranteed the deal and price. They therefore stand to lose millions if the deal is not cleared and Citibank start looking for another buyer.

13 July, 2012
Japan, the world's second largest music market, gave Universal “unconditional” approval for takeover of EMI. Although the Japanese Fair Trade Commission approved the motion, some argued that it was not surprising as Universal and EMI's combined market share is approx 30 percent in Japan, less than anywhere in the world. Universal are still sweating on EU Commission and American Senate Hearings.

16 July, 2012
The Financial Times report that Universal plan to sell Virgin Records to sweeten their purchase of EMI, with speculations that Parlophone may be also sold. This sale is planned to a big enough to ease regulators' concerns, as combined Universal and Emi would control 40 percent market share in Europe and the US.

17 July, 2012
Multiple sources report that Virgin's co-founder, Sir Richard Branson, may be in the hunt for Virgin records if it is to be sold. He is reported to have held talks with Patrick Zelnik (owner of French independent label Naïve Records) which would mean any move for Virgin would be a partnership between the two. Branson sold Virgin Records for $510 million in 1992.

20 July, 2012
Radiohead's Ed O'Brien. Pink Floyd's Nick Mason and Sandie Shaw say that artists should get a share of any divestments, stating in an open letter that, “Divestments in the wake of mergers should first offer copyrights, at market rates, to the artists who created them.” Also emerged that Universal's Lucian Grange is offering some indie labels who are represented by European lobby group Impala, first chance to bid for EMI's assets.

21 August, 2012
Canada also threw their support behind the takeover, with the Canadian Competition Bureau giving the acquisition the all clear without asking for concessions from Universal over the $1.9 billion deal. Universal edge closer.

4 September, 2012
It is reported that the all clear has been all but given to Universal. According to Reuters, the European Commission had seen enough to give their final approval on the deal, which has been playing out now for over eighteen months.

19 September, 2012
The Australian Independent Record Label Commission [AIR] expressed their disappointment over the ACCC's decision not to oppose the merger. Global rights agency Merlin also expressed their dismay, with CEO Charles Caladas saying it was a “terrible day for Australian music consumers.”

21 September 2012
The all clear was given by both the European Commission and the US Federal Trade Commission for Universal's acquisition of EMI's music division. The $1.9 billion deal had been drawn out for over eighteen months and has given closure to the 'split and sale' of EMI. Universal now hold an undisputed global market share as the biggest of the major labels. EMI CEO Roger Faxon resigns and sends this email to staff: “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.”