Universal, a unit of Vivendi SA, sold EMI’s Mute Records, the home of Depeche Mode, to BMG for about 10 million pounds ($16 million) in December, and it still must sell other smaller labels to complete its obligations to antitrust authorities. The sales are expected to take place in the next few months.
When subtracting proceeds from the sales, Universal will have spent around 600 million pounds ($942 million) to acquire EMI’s recording operations in the world’s three largest markets, the U.S., Japan and Germany. The company has said it will save 100 million pounds ($157 million) a year through cost cuts enabled by the acquisition.
But the Parlophone sale gouges a significant U.K.-based hole in the roster, especially given the iconic music company’s British roots.
“Following this transaction, we will continue with our global reinvestment program that is rebuilding EMI and ensuring that the company is able to reach its full potential,” Grainge said in a statement Thursday.
Stephen Cooper, Warner Music’s chief executive, said the acquisition represents a “unique opportunity,” and the Parlophone brand is “highly complementary” to its current roster of artists and territories. Major Warner Music artists include Bruno Mars, Jason Mraz and Wiz Khalifa.
Warner Music will finance a substantial portion of the purchase price through a new loan. The deal is expected to close by the middle of the year.
Edgar Bronfman Jr., who had unsuccessfully tried to buy EMI as Warner Music’s CEO, stepped down in 2011, months after selling the company to billionaire Len Blavatnik’s Access Industries for about $1.3 billion that July. While he remains on the Warner Music board, he did not take part in the Parlophone deal.
The publishing division of EMI, which handles royalties from songwriting copyrights, was sold for $2.2 billion to a consortium led by Sony/ATV, a joint venture between Sony Corp. and the Michael Jackson estate, last June.
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