Universal gives Citigroup a billion in pending EMI takeover
By CMU Editorial | Published on Tuesday 11 September 2012
Universal Music has paid just under a billion of the £1.2 billion that it committed to pay Citigroup for the EMI record company, according to parent company Vivendi.
As previously reported, the major committed last year to pay the US bank the bulk of the money it bid for the EMI labels in early September 2012 oblivious of whether that deal had been approved by the various regulatory bodies around the world who would inevitably have to investigate the acquisition.
There were reports that the major had tried to negotiate an extension on that pay day once it became clear the regulatory process in the US and Europe was going to take longer than hoped, and even rumours it had succeeded, though in the end the early September deadline stuck. Technically Universal was due to make payment on Sunday, but Vivendi said yesterday that funds had actually been transferred at the start of last week.
The regulatory process is, of course, still ongoing, though in Europe at least it should now be in its final phase. European Commission regulators met with reps from each of the EU’s member states on Friday to discuss the latest concessions proposed by Universal to allay market dominance fears. The outcome of that meeting is not known, though EC regulators must announce their final decision before 27 Sep.
It is thought that Universal will have committed to offload between a quarter and a third of its new acquisition to secure approval in Europe, most likely including the global sale of the Parlophone and maybe Chrysalis catalogues and businesses (excluding The Beatles and Robbie Williams).
If both Parlophone and Chrysalis were to be sold outright to one buyer, that would in essence create a new independent EMI business in the UK (with only Virgin Records joining the rest of Universal UK).
Unless, of course, they went to an existing music company, such as BMG, which would become a really big player in the UK music market if it added the Parlophone and Chrysalis master-recording catalogues to its existing music publishing interests (which, of course, include the Chrysalis songs catalogue it acquired in 2010).
The US regulatory investigation is also thought to be nearing its completion too. No concessions have been publicly offered by Universal in America, despite some artist and consumer groups there calling for divestments in the US in line with those in Europe. It might be that the US Federal Trade Commission decides no concessions are necessary, or that those already committed to in Europe, which will likely go beyond the European Economic Area, are sufficient.