Media News - Wednesday, September 17, 2008
The European Commission has given Japanese electronics giant Sony the green light to purchase outright the record label Sony BMG in an EUR 840m buy-out from German media firm Bertelsmann. The EU executive sees no competition worries resulting from the merger, but indie music labels say Brussels is missing the point - it is cultural diversity concerns that are under threat from the creation of such a music titan. On Monday (15 September), the EU executive said that after examining the deal, it was unlikely that the transaction would harm competition, over howls of protest from independent music firms. In August, Sony announced it intended to purchase Bertelsmann's 50 percent stake in Sony BMG, jointly owned by the two companies, for EUR 630m, as well as some EUR 210m in cash of Sony BMG revenues. Following the purchase, Sony will become the sole owner of Sony BMG, which will be renamed Sony Music Entertainment Inc. The Japanese firm would now become the second largest music company in the world. The commission said that the transaction would not lead to any 'horizontal overlaps in the music recording markets,' as Sony has no other music recording activities in Europe. The European independent music label trade association, IMPALA, however strongly disagreed, saying the merger threatens cultural diversity and that the commission did not carry out an in-depth investigation as to the consequences of the deal. (EU Observer)
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