The European Union gave the green light without reservation, US approval expected within days:
- The proposed marriage will leave four industry majors with about 80% of the world music market.
“The merger was approved without conditions,” said a spokesman for the German media group.
The EU said initial concerns that the deal could lead to higher CD prices and fewer customer choices were unfounded.
Japanese Sony and German Bertelsmann are the second and fifth biggest record companies worldwide.
….Sony and Bertelsmann’s proposed marriage would create the world’s second largest record label, behind Universal Music, despite the deal excluding Sony’s recorded music business in Japan.
The merged company, to be called Sony BMG, is to be based in New York.
The deal will bring together under one roof Sony stars such as Barbara Streisand and Beyonce and BMG stars, including Elvis Presley and Christina Aguilera.
….The coming together of Sony and BMG takes place after EMI, the third largest record company, failed last year to buy the fourth largest – Warner Music.
US Warner was eventually bought by Canadian media mogul Edgar Bronfman Jr for $2.6bn (or £1.5bn at the time).
The deal between Sony and Bertelsmann will leave 80% of the market in the hands of four groups: Sony-BMG, Vivendi Universal, EMI and Warner Music.
However, the 50-50 joint venture is still undergoing anti-trust review in the US, but approval is expected within days.
Recently, the Financial Times reported that the two companies plan to shed 2,000 jobs, or a quarter of their combined workforce. [BBC]
Obviously they’re going to slash jobs – isn’t that the point of a merger such as this, creating then eliminating redundancies? The music world gets smaller and smaller.