UNIVERSAL BUYS EMI IN £1.2bn DEAL

EMI, the iconic British music giant behind Coldplay, the Beatles, and Katy Perry is to be broken up after Vivendi’s Universal Music Group struck an £1.2bn deal for its music publishing arm at the eleventh hour.
Universal was one of the early contenders to buy EMI, but briefly dropped out of the running last month after failing to agree terms over EMI’s pensions liabilities, leaving Warner Music in pole position to seal a deal.

However, talks with Warner hit a similar sticking point and Universal returned to the table this week to resume talks where they left off. It is understood to have sealed the deal after Citigroup, EMI’s US investor, agreed to the pension liabilities on itself.Separately, a consortium led by Sony is excpected to sale a $2.2bn deal for EMI’s music publishing division, which houses intellectual property rights, trumping BMG which was the frontrunner as late as last week.

Citigroup will recoup around $4.1bn from the two deals - far more than the combined price tag of around $3.3bn that had been expected.

The deal will widen the gap between Universal - already the biggest music company in the world - and its rivals. It also marks a coup for Lucian Grainge who was promoted to chief executive in January and took the chairman role in March.

He said: "For me, as an Englishman, EMI was the preeminent music company that I grew up with. Its artists and their music provided the soundtrack to my teenageyears. Therefore, UMG is committed to both preserving EMI’s cultural heritageand artistic diversity and also investing in its artists and people to grow the company’s assets for the future."