Sony’s planned acquisition of EMI Music Publishing has shifted to the next stage, with the music major having completed its notification filing to European competition authorities.
The European Commission should have now received enough data to consider the filing complete and decide whether or not to launch its investigation into the impact of Sony’s plan.
The clock is ticking. A deadline of October 26 is now set for the commission to make an initial assessment on the takeover, at which time it can either give the green-light or kick-start a phase two probe. Pan-European music companies’ trade body IMPALA is confident the second of these options will be taken.
This transaction “would disrupt competition and harm consumers in an already overly concentrated music market. Given recent precedents set by the European Commission, we believe Sony’s take over will face stiff opposition,” comments Helen Smith, IMPALA’s Brussels-based Executive Chair.
As previously reported, IMPALA last month filed an objection with the commission about Sony’s outright acquisition of EMI Music Publishing, which it described as “seismic” and a cultural road block for artists, entrepreneurs and music fans.
Earlier this year, Sony Corporation said it would pay about $2.3 billion for an additional 60 percent stake in EMI Music Publishing owned by consortium partners led by Abu Dhabi’s Mubadala Investment Co, and the nearly 10 percent owned by the Michael Jackson Estate.
That would value EMI Music Publishing at $4.75 billion, including debt, a sum well advanced on its $2.2 billion value back in 2012 when Sony/ATV Music Publishing chairman Martin Bandier led the charge to buy the publishing giant, which he led for 17-years prior to taking the helm at Sony/ATV in April 2007.
If the deal went ahead without concessions, Sony’s catalogue would nearly double, from 2.16 million to 4.21 million works, and the enlarged group would have a “huge pool of writers with rights in more songs than any other company,” including songs Sony doesn’t own 100%, notes IMPALA.
“No company would control so much music, making Sony the most powerful major in the market today,” the lobby body warns.
Also, IMPALA said the transaction, if approved, would harm collecting societies, songwriters and composers, and consumers who would face higher charges for music services.
The peak body takes some comfort from the precedent set in 2012, when the Commission ruled that the tie-up of Sony and EMI would give Sony too much control and ordered divestments for the music giant to become a minority shareholder.
Since its foundation in 2000, IMPALA has lobbied on a string of mega-mergers and acquisitions, including the Universal-EMI pact, which was approved with Universal ordered to divest two-thirds of EMI’s labels and respect 10 year behavioural undertakings in what was the biggest set of music industry merger remedies ever secured.