A partnership led by former Universal Music chief Edgar Bronfman Jr. has agreed to buy Warner Music Group for $2.6 billion cash, creating one of the world’s largest independent music companies.
THE ANNOUNCEMENT Monday came just hours after London-based EMI Group PLC said it had withdrawn its offer to purchase Warner Music, a unit of the giant media conglomerate Time Warner Inc.
Under terms of the Bronfman group’s deal, Time Warner would retain an option to buy back a minority stake in the company, which is home to such artists as Madonna, R.E.M and the Red Hot Chili Peppers.
The purchase, which also includes Time Warner’s Warner/Chappell Music publishing business, would create one of the world’s largest independent music companies and include some of the industry’s best known music labels, including Warner Bros., Atlantic and Elektra Records.
“Warner Music Group is one of the world’s greatest recorded music and music publishing companies, and we have great faith in its potential for growth as an independent company and in the long-term opportunities of this industry,” Bronfman said. “We have brought together a highly sophisticated and well-financed group of investors to support the business.”
Until the Bronfman group’s offer emerged last week, it had appeared that EMI, the world’s third-largest music company, was the front-runner to buy Warner Music.
EMI, whose artists include Robbie Williams, Kylie Minogue and Radiohead, said in Monday’s statement that it was maintaining its goal of driving shareholder value.
“We have concluded that it is no longer possible to reach an agreement on terms which would be acceptable to both parties and in the interests of EMI’s shareholders,” Eric Nicoli, EMI chairman, said in the statement.
The company last week announced its interim profit results, revealing that its profit sank in the first half of its fiscal year.
EMI said its profit dropped to $10.0 million for the six months ending Sept. 30.
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