A Sony Corp.-led deal to acquire rival EMI’s music publishing assets for $2.2 billion has won conditional approval from European regulators, according to a source.
European Union antitrust officials gave the deal the greenlight Thursday.
Sony will not face a so-called second-phase review of its bid after agreeing to divest certain assets.
To win approval, Sony agreed to sell several music catalogs, including Virgin Records in the US and in Europe, and Famous Music in the UK, according to the Financial Times, which first reported the news.
During its review of the deal, the European Commission found that without the sale of those rights, Sony/ATV would have been able to control the online licensing of Anglo-American chart hits in Europe.
“Sony and Mubadala have offered to divest valuable and attractive catalogues containing bestselling titles as well as works of successful and promising authors,” said Competition Commissioner Joaquin Almunia. He added the sale of the publishing rights to those works would ensure “consumer choice and cultural diversity.”
In the US, the Federal Trade Commission, which is still reviewing the acquisition, has yet to sign off on the deal.
A source said Sony initially suggested selling off some assets to appease regulators but had to add more divestitures in order to get the go-ahead from Brussels.
The deal to acquire EMI Publishing, with rights to artists such as Pink and Pharrell Williams, will raise Sony’s share of the global music publishing market to 30 percent.
Sony reportedly plans to lay off some 326 EMI employees over the next two years to achieve cost savings as part of its business plan.
Sources said EMI Publishing has around 500 staff in total.
Struggling with razor-thin margins on flat-screen TVs and other electronics, Sony has also disclosed plans to hand out pink slips around the globe under new boss Kazuo Hirai.
Sony is leading the EMI purchase with the financial backing of other partners including Mubadala Development Co., Jynwel Capital, Blackstone Group, GSO Capital Partners and music impresario David Geffen.
Sony will have a 38 percent stake in the new entity.
With AP