Universal submits response to EC concerns over EMI deal
By CMU Editorial | Published on Friday 6 July 2012
Universal Music was expected to submit its response to the European Commission’s statement of objections to its bid to buy the EMI record company late last night, having got a 48 hour extension on the original deadline for its next submission in the EC’s competition enquiry into the proposed deal.
As much previously reported, Universal, the biggest music company in the world, wants to buy the recorded music side of EMI. The deal is subject to regulator approval in both the US and Europe, and regulators in the latter provided the major with a statement of objections, outlining competition concerns about the proposed merger, last month.
There was much media speculation earlier this week as to what that statement of objections said, though the areas insider sources claimed were of most concern to EC regulators came as no surprise – they included the level of market share a combined Universal/EMI would enjoy in some territories, the influence that would give it over media exposure, and reservations regards Universal’s claims piracy and the dominance of certain digital music services curtailed its negotiating power in the digital domain.
Once Universal’s response to the EC’s concerns has been submitted, the major could have opted for an oral hearing, a private session with all key Commission people and competition representatives from member states, to hammer out issues raised about the deal. But the major has declined such an option, saying it feels written correspondence and smaller meetings with officials are more appropriate.
One source told Reuters: “The feeling is that an oral debate is not the best place for complex and detailed discussions and analysis of the deal. It was felt that this would be best served through written submissions and meetings with the competition authorities”.
Although Universal has never publicly offered concessions to smooth over the deal, such as committing to offload certain assets, it is widely assumed such remedies will be required to secure EC approval, and there is speculation that some such concessions have already been floated in private.
Now that the initial response paper has been submitted, Universal will have until 18 Jul to put forward any concessions, though they could ask for more time, submitting such proposals on 1 Aug. I’m speculating (wildly) that the major could opt to sell off VEVO, Virgin Records and V2 to placate regulators. Basically anything beginning with “V”, that would keep it simple.
As previously reported, the Sony-led bid to buy EMI Music Publishing, approved by the EC subject to concessions in April, won US approval last week, and the transaction was completed almost immediately. Sony/ATV chiefs are now in EMI HQ busy planning mass redundancies, I mean, a fully integrated, talent-rewarding, creator-centric future.