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Universal to sell three publishing catalogues

By | Published on Tuesday 27 March 2012

Universal Music

Universal Music is planning on selling three of its publishing catalogues, the Financial Times has revealed, in a bid to raise up to £200 million to help fund the mega-major’s plans bid to buy the EMI record companies.

According to the FT, a catalogue of classical works, another of gospel music, and a third of German schlager music, are all on the block, with Bank Of America Merrill Lynch coordinating the sale. Around twelve bidders have already expressed an interest, including BMG (and possibly Imagem Music – they’d likely bid)

When Universal announced last November that it had reached a deal with EMI owners Citigroup to buy the music major’s record companies it said it planned to fund some of the deal by selling off existing periphery assets. That will reduce the burden of the ambitious acquisition on parent company Vivendi, who are very sensitive about losing their cherished triple-B credit rating.

Of course Universal may also be forced to sell off some of its existing assets, or some of EMI’s label assets, in order to get regulator approval of its latest takeover bid. As previously reported, the European Commission’s investigation into Universal’s takeover proposals has just entered a second phase, and regulator enquiries are ongoing in the US too.

So far Universal has resisted the temptation of offering concessions to allay the fears expressed by critics of its EMI deal, believing the acquisition could be approved on both sides of the Atlantic without so called remedies being enforced.

And the sale of three publishing catalogues is clearly about revenue generation rather than placating critics, given competition regulators will focus in the main on the impact a combined Universal/EMI record company will have on the sound recordings marketplace, even though Universal’s music publishing business is also a major player – because, of course, that bit of Universal’s business will not grow as part of the EMI deal.

Ironically, Universal reducing the size of its publishing assets might be more relevant to the investigation into Sony/ATV’s bid to buy EMI Music Publishing, which will create a powerhouse in the music publishing domain.

Universal Music Publishing will remain a formidable competitor to the combined Sony/ATV/EMI – which Sony will surely point out when defending its latest attempt to grow its music assets – though it will be slightly less formidable post this proposed $200 million sale, making Sony/ATV/EMI look even more dangerously dominant, especially in the collecting society world.

Universal has so far not officially commented on the publishing catalogues sale.

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