US recording companies Universal Music Group Inc (UMG) and Warner Music Group have signed a definitive agreement that will see the latter pay GBP487m (USD765m/EUR571m) for Parlophone Label Group (PLG).
In September 2012, UMG was cleared by the European Commission to acquire EMI Recorded Music. However, approval was granted on condition that UMG parent Vivendi SA (EPA:VIV) dispose of various music assets, PLG included. PLG owns the Parlophone and Chrysalis labels and also covers EMI’s recorded music business in Belgium, the Czech Republic, Denmark, France, Norway, Portugal, Spain, Slovakia and Sweden.
UMG said it expected to finalise the divestment later in the year. Closure is subject to securing approval from various regulators and consultations with employees in a number of jurisdictions.
Commenting on the deal, UMG chairman and chief executive Lucian Grainge said he was pleased to have Warner Music as the new home for PLG artists. The deal will allow UMG to pursue its global reinvestment programme, which includes restoring the strength of EMI and helping the company realise its full potential, Grainge added.
Goldman Sachs Group Inc (NYSE:GS) and Bank of America Merrill Lynch acted as financial advisers to UMG and Vivendi, while SJ Berwin LLP, Shearman & Sterling LLP and Smiths Law LLP dealth with legal issues on the vendors’ behalf.