Former EMI assets acquired by label group for around $765 million
Warner Music Group has won the divestment derby and acquired the Parlophone Label Group for approximately $765 million from Universal Music Group.UMG had auctioned the Parlophone holdings to get regulatory approval for its $1.9 billion acquisition of EMI Music’s labels, closed last fall. UMG has since established its Capitol Music Group as a stand-alone repository for those assets. In the all-cash deal concluded Thursday, WMG will now control the Parlophone, Chrysalis and Ensign labels, plus EMI’s recorded music operations in Belgium, the Czech Republic, Denmark, France, Norway, Portugal, Spain, Slovakia and Sweden. Parlophone’s roster and catalog include Coldplay, Gorillaz, Radiohead, Pink Floyd, Air, Daft Punk, Danger Mouse, David Guetta, Duran Duran, Iron Maiden, Kate Bush, Pet Shop Boys and Tina Turner. The company’s best-known act, the Beatles, moved to UMG with the EMI purchase. Addition of Parlophone’s holdings will supply some market-share lift to WMG, now a distant third among the three major label units. Last year, Warner accounted for 19.1% of the total domestic album market, according to Nielsen SoundScan. In sealing the deal, WMG prevailed in a bidding field that had reportedly included Sony, BMG, Simon Fuller and Chris Blackwell. In late 2011, Warner – which had itself just been purchased by Russia-born industrialist Len Blavatnik’s Access Industries — abruptly stepped away from the bidding on the totality of EMI’s assets, after years of uncompleted or frustrated attempts to splice the two giant music firms. Blavatnik said Thursday that the Parlophone purchase was “a very important milestone for Warner Music, reflecting our commitment to artist development by strengthening our worldwide roster, global footprint and executive talent.” WMG CEO Stephen Cooper said in a statement, “Having the Parlophone Label Group become part of our family represents a unique opportunity for us to join with legendary record labels and artists that are highly complementary to our existing organization from a creative, geographic and strategic standpoint. We are committed to making this a great outcome for Parlophone’s artists and employees, who will find in WMG a similar spirit and culture that is dedicated to providing the most supportive and innovative home for recording artists. The continuation of the Parlophone legacy and brand are central to the future success of this combination.” On the seller’s side, UMG chairman-CEO Lucian Grainge said, “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. And we’re satisfied that our agreement with Warner Music will provide a home for PLG artists.” WMG said it was financing the Parlophone buy through a new term loan facility provided by Credit Suisse, Barclays, UBS Macquarie and Nomura, with the deal expected to close in mid-2013 following regulatory scrutiny.
Want Entertainment News First? Sign up for Variety Alerts and Newsletters!