So, as expected, German media conglom Bertelsmann confirmed yesterday that it intends to sell its music publishing company BMG Music Publishing to the Vivendi owned Universal Music, who are expected to merge the firm with its own Universal Music Publishing to create the largest music publishing house in the world.
Confirming his company's acquisition, Vivendi CEO Jean-Bernard Levy told reporters yesterday: "The acquisition of BMG Music Publishing is a unique opportunity to grow our music publishing business and enhance the value of Universal Music Group at a time when the music market is improving, supported by technological innovations and digital sales".
As mentioned yesterday, the deal will now require approval from competition authorities in both the US and Europe. As also mentioned yesterday, insiders seem to think that a merger in the publishing sector is more likely to gain such approval than a merger in the recording sector. But assume nothing is a foregone conclusion, because pan-European independent label trade body IMPALA said yesterday that they were hopeful the European Commission would not, in fact, let the Universal acquisition of BMG Music Publishing go ahead.
IMPALA, who, of course, were recently successful in their bid to have the EC's approval of the Sony BMG record label merger overturned, said yesterday: "[We are] concerned that the proposed sale by Bertelsmann of BMG Music Publishing to Vivendi Universal would further damage competition in recorded music, strengthen existing collective dominance in publishing, and prejudice collecting societies and the online licensing and synchronisation markets".
They continued: "The independent music companies takes the view that regulatory approval will not be obtained. Already in 2000, in the attempted EMI Warner merger of publishing as well as recording, the EU concluded that further concentration in the music publishing market could not be tolerated. The Commission expressly stipulated then that the merger of two major publishing groups would significantly strengthen an existing collective dominant position in the music publishing market".
They conclude: "The independents believe that the European Commission will have little choice but to reach the same conclusion with BMG and Universal in 2006, where the market is even already more concentrated than in 2000. They also point out that new merger rules will make regulatory approval more diffilult to obtain. The fact that Universal is a smaller major publisher will not change the Commission's assessment".
IMPALA President Patrick Zelnik added: "This merger would have serious repercussions for competition in the publishing and recording of music. The Commission has already reached a verdict - in 2000. This move contradicts Universal's own position in 2000 when it opposed the attempted EMI Warner merger, precisely because of the impact of further concentration in music publishing".
All good fun. The timescale of the approval process is not yet clear, though Vivendi and Bertelsmann are known to be keen to have the sale completed by the end of the year.