UMG Could Sell Off Virgin Records To Meet EU Requirements
July 16, 2012
As part of its concessions for approval of its acquisition of EMI's recorded music division, Universal Music Group may offer to sell off some of EMI's imprint labels. Sources tell The New York Times that UMG is likely to divest Virgin Records and EMI Classics to appease European Commission regulators. Another likely spinoff from EMI could be its distribution rights for independent label Mute.
The Times asks that if UMG will have to divest itself of multiple assets, will it sell off so much of EMI that the deal will no longer be as attractive? "There’s no question that we expect that these divestitures will erode some of the potential values and synergies," Tuna N. Amobi of Standard & Poor’s Equity Research told the paper. "The only question is how much value will be eroded."
Meetings will take place in Brussels this week between UMG executives and members of the EC to discuss Universal's concessions.
Last week, UMG Chairman/CEO Lucien Grainge told the Financial Times that as part of the UMG-EC negotiations, he is working on a collaborative "manifesto for the new music industry," which would include "a new way of working with all these startup platforms ... in a fair, open-minded way."