The European Commission announced today that it has approved Universal's $1.9 billion takeover of rival label EMI, following in the wake of approval from Japan, New Zealand, Canada, and Australia.
While the buyout is good news for Universal, it did come with some major concessions. Chief among these is the company's divestment of major EMI assets. Universal will be forced to sell Parlophone (home to Coldplay, David Guetta, Blur, Gorillaz, Pink Floyd, David Bowie, and more);EMI's classical imprint; Mute (The Ramones and Jethro Tull); and a half-share in the Now! That's What I Call Music series. However, Universal got a major boost by retaining the rights to the Beatles' catalog.
Even with the major divestments, many are still unhappy with the deal, complaining that Universal is gobbling up too much of the competition. Martin Mills, chairman of the Beggars Group (which includes indie labels 4AD, Matador, Rough Trade, and XL Recordings) had this to say:
“It’s good to see that the commission has seen this deal as such a threat to the market that it has demanded and received truly swinging commitments on divestments. However, that should not conceal that fact that Universal’s arrogance has paid off for them, that they have destroyed a significant competitor, and that even with these divestments their ability to dominate and control the market has reached even more unacceptable levels.”
The Federal Trade Commission could demand more divestment, but insiders view that as unlikely. A U.S. vote is expected in the coming days. [Daily Swarm]