Consortium must sell global rights to some top artists to secure deal for EMI
A Sony-led consortium including Abu Dhabi's Mubadala has won EU approval to buy EMI's music publishing business for $2.2bn, on the condition that it sell the worldwide publishing rights of artists including Robbie Williams and Lenny Krativz.
Sony, with Blackstone Group, Abu Dhabi's Mubadala Development Co, Raine Group and music and film mogul David Geffen, won the bidding for EMI Publishing last year in a deal that will put Sony top in global music publishing.
European competition regulators approved the deal after the consortium proposed selling the rights to four back-catalogues, including the musical works of 12 contemporary artists.
"Sony and Mubadala have offered to divest valuable and attractive catalogues containing bestselling titles as well as works of successful and promising authors," said Joaquin Almunia, the European commissioner for competition issues.
"I am therefore satisfied that the competitive dynamics in the online music publishing business will be maintained so as to ensure consumer choice and cultural diversity."
An initial investigation by the Commission had concluded that the deal was not conducive to fair competition, but Sony and its partners agreed to divest more assets, bringing the total divestment to around 25 million euros, depending on how much is raised from the asset sales.
The catalogues to be sold are Virgin UK, Virgin Europe, Virgin US and Famous Music UK and include artists such as Gary Barlow, Ozzy Osbourne, Ben Harper, Placebo and The Kooks, as well as Lenny Kravitz and Robbie Williams.
"The Commission therefore concluded that, subject to these divestments, the transaction would not significantly impede effective competition in the European economic area or any substantial part of it," the Commission said.
The catalogues are likely to be auctioned off in the coming months, sources close to the negotiations said.
Before the deal, Sony was the fourth biggest player in music publishing, behind Vivendi's Universal Music Group, EMI and Warner Music.
The agreement will push it into first place, owning the rights to about 3 million songs such as "New York, New York" and Adele's recent smash "Rolling in the Deep".
Citigroup is selling EMI after taking over the group when its previous owner, private equity group Terra Firma, defaulted on borrowings from the investment bank.
Impala, a trade organisation representing Europe's independent music companies, had urged the EU regulator to veto the deal because it would give Sony excessive power and result in an overly concentrated market.
EU competition regulators are currently conducting a fullscale investigation into a bid by Universal to buy EMI's recorded music business, citing concerns about the combined group's potential high market share and increased market power.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.