Universal Music Group and Sony Corp. have reached agreements with Citigroup Inc. to buy EMI Group’s music business for a combined $4.1 billion.
The joint sale, which is $3 billion less than Citigroup’s initial asking price, would split EMI in two. The company’s recorded music would go to Universal for approximately $1.9 billion, and the publishing division would be sold to Sony for $2.2 billion.
In October, Citigroup had asked for a minimum of $1.9 billion for the recorded music business and $2.5 billion for EMI’s publishing business.
Among EMI’s roster of artists are the Beatles, Beastie Boys, Coldplay, Norah Jones, Katy Perry and Pink Floyd. Its publishing catalog includes “New York, New York,” “We Are the Champions,” and “Have Yourself a Merry Little Christmas.”
The deals are subject to approvals by antitrust regulators in both the United States and Europe. Universal is already the largest recorded music company in the world, with an estimated 27 percent of the global market, according to the International Federation of the Phonographic Industry. Adding EMI’s share of 9 percent would put Universal at a comfortable distance relative to Sony when it comes to recorded music.
The purchase also keeps EMI out of the hands of Warner Music Group, which would have gained enough market share to closely rival Universal and Sony. Warner offered to assume the pension obligations to EMI’s 21,000 employees, but offered $1 billion in cash for EMI’s recorded music.
Universal’s $1.9 billion cash offer, however, left Citigroup with the pension obligations, which have ranged from $200 million to $600 million, according to the LA Times.
