EMI Deal Approved By Canada As Commissions Hold Out On Universal

21 August 2012 | 3:49 pm | Scott Fitzsimons

Will Universal pay for a label they don't own?

Canada has joined the likes of Japan and New Zealand in approving the proposed sale of EMI's recorded music division to the Universal Music Group.

The Canadian Competition Bureau has give the deal – the biggest international music industry story of the past 12 months – the all clear without asking for concessions from Universal over the $1.9 billion deal. The European Commission and America's FTC are still opposing the deal as it stands, with Universal desperately promising to sell off EMI assets to sweeten the deal.

Following the news Universal released a statement saying that, “Our investment in EMI will create more opportunities for new and established artists, expand music output and consumer choice, and support new digital services. We welcome the Bureau's decision and will continue to work closely with regulators in other jurisdictions to obtain further clearances.”

Last year the sale of EMI's assets was facilitated by Citibank – Universal took the recorded music division and a Sony-ATV led consortium nabbed EMI Publishing. The publishing arm's sale was completed earlier this year and the Universal deal seemed to be moving towards clearance as well, before the Euro Commission and the FTC put a stop to the deal progressing further. As Universal are believed to have already guaranteed the deal, they are desperate to make the deal go through and not have Citibank put the label back up for sale. Universal could potentially find themselves paying part of a deal for one of their competitors to pick up the label.

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Sources inside Universal have expressed concern that the number of divestments they are being asked to make could destroy EMI's identity and that of its famous imprints. Independent labels are lining up to acquire parts of labels such as Parlophone, Chrysalis, Ensign, Mute and EMI Classics as well as offices around the world.

Universal is currently in a game of proposal tennis with the Commissions, who knocked back the original offer of divestments, and a decision is expected by 9 September from the Commission, just a day before Universal's payment is expected on 10 September. Billboard points out that if the European Commission extend the deadline – as they possibly can – Universal will be asked to pay for a label they're not guaranteed to own.