Despite regulator-mandated divestitures that will see Universal Music Group selling off nearly a third of EMI Music’s label holdings, UMG chairman-CEO Lucian Grainge is expressing satisfaction with the conclusion of its $1.9 billion purchase.

Following 10 months of scrutiny and sometimes fractious debate, the European Commission and the U.S.’ Federal Trade Commission approved the deal for the EMI labels within hours of each other on Friday.

Cost of approval proved steep: A source with knowledge of the transaction confirmed that to get the deal approved, UMG and EMI agreed to divest assets that annually generate some €350 million ($457 million) in revenue.

Nonetheless, Grainge said in an interview with Daily Variety, “It’s a deal that we would do all over again.”

Completion of the transaction adds even more bulk to the world’s largest music company, which is owned by Paris-based Vivendi SA, and reduces the number of major music firms from four to three. UMG will assume official control of the company Sept. 28.

The EC gave the purchase a go-ahead after UMG and EMI agreed to extend a number of divestitures planned for European territories – including the selloff of EMI’s Parlophone, Chrysalis and Mute labels and UMG’s Sanctuary catalog unit – on a worldwide basis. EMI subsidiaries in 10 territories were also offloaded.

No concessions were sought Stateside, where the FTC voted 5-0 to close its investigation of the sale without further action.

The Parlophone divestiture does not include the Beatles catalog, the crown jewel of EMI’s holdings. Contrary to one published report, the Queen catalog is not being sold. Chrysalis artist Robbie Williams also will remain with the company.

“We are satisfied,” Grainge said. “We’ve agreed to divest probably more than we would have preferred. Nevertheless, what we are divesting are assets that have great importance and great value, and we’re confident that with our sales strategy and the number of people who have expressed interest, both in private equity as well as within the trade, that we’ll be able to create exactly the level of value that we would expect to satisfy ourselves as well as our shareholders.”

Grainge emphasized the upside of the transaction. “You have to remember that we are acquiring two-thirds of EMI,” he noted. “We are acquiring proper record businesses like Capitol. We are acquiring Virgin (Records). We’re acquiring the EMI labels within the top three worldwide music markets, in the United States, Japan and Germany. We’ve received regulatory clearance as they are.”

Grainge said the merging of the two majors will create cost savings of £100 million ($162 million).

He added, “For us to have these iconic brands, to work with artists ranging from the Beatles to Robbie Williams, to Katy Perry, Lady Antebellum, Bob Seger, Frank Sinatra, Charles Aznavour (plus) rich new artists, is a privilege, commercially enchanting and creatively exciting.”

EMI Music was placed on the sales block last year by Citigroup, which had assumed control of the troubled British music firm after a loan default by previous owner Terra Firma.

A separate $2.2 billion bid for EMI Music Publishing by an investment consortium led by Sony/ATV Music cleared regulatory hurdles with relative ease (Daily Variety, July 2).

However, loud objection to UMG’s buy of the EMI labels by European trade groups ultimately led to major divestment concessions by EMI. The mandated selloff, brokered by Goldman Sachs, should be completed within six months.

Per an EC memorandum on the divestments, UMG must sell the labels to “purchasers that are either already active as a record company or have a proven track record in the music industry.”

It will be a buyer’s market, but Grainge expressed confidence that UMG would be able to derive maximum value from the asset sales.

He said, “With the amount of competition within the market, the quality of the assets, the value that is placed on them and the multiples that were paid for them in the original deal and the slide in recorded music, compared to what it was 10 or 15 years ago, I think that we have a compelling situation. The sales process is a small piece of this jigsaw.”

Several companies now stand to benefit from divestitures.

Hartwig Masuch, CEO of BMG Rights Management – the Bertelsmann-KKR joint venture that has snapped up a number of music publishing firms over the past two years – recently said the company would be interested in picking up some of the offloaded label assets.

The move would mark Bertelsmann’s return to the label biz. The company was formerly partnered with Sony Music in Sony BMG Music Entertainment. Sony acquired Bertelsmann’s 50% stake in the company in 2008.

It is likely that Warner Music Group – which becomes a distant No. 3 among major music firms with the approval of the UMG-EMI deal – would seriously consider acquiring some of the castoff EMI holdings. WMG, which was acquired for $3.3 billion by industrialist Len Blavatnik’s Access Industries last year, backed out of bidding on the EMI labels in the 11th hour.

Looking beyond the selloff, Grainge said, “At the end of the day, EMI will have a robust, stable, committed music company investing in it. … We want to be in the vanguard of the resurrection, both commercially and creatively, of the entire music business.”