The Universal Music Group received regulatory clearance in Europe and the United States on Friday for its $1.9 billion takeover of EMI Music, the storied British record label behind the Beatles, the Beach Boys, Norah Jones and Coldplay.
The deal allows Universal to expand its dominance as the world's largest music company, but the compromise it struck with regulators significantly pares down its ambitions.
After months of tense negotiations, Universal agreed to divestitself of about a third of the assets of EMI, including most of Parlophone, EMI's flagship label in Europe, along with a number of formerly independent labels, nine national subsidiaries of EMI across Europe and other rights. Universal will also sell a handful of its own assets, and it agreed to a set of market controls that will govern how it handles contracts with digital music services.
The European Commission's approval was announced Friday morning in Brussels, and the Federal Trade Commission followed with its clearance shortly thereafter, calling for no additional concessions. The deal is expected to close within a week.
In a statement, Vivendi said it was pleased with the result and that the deal would help Universal remain “true to its vision: to invest in talent and grow the company to offer consumers more music and more choice.”
Universal's deal for EMI, reached last November with Citigroup, was closely scrutinized on both sides of the Atlantic, with independent music groups, consumer advocates and major rivals contending that it would give Universal too much market power. Much of the concern centered on the new digital music market, in which, these critics argued, control of a large share of the available content could give any label too much of an advantage.
As a result of its acquisition of two-thirds of EMI, Universal will have about 36 percent of the world's recorded music market, according to figures from Music & Copyright, a British trade publication. Sony Music Entertainment, the next largest company, has a 21.6 percent share, and Warner Music Group, the only other major, has 15 percent.
A little more than a decade ago there were six major labels, but because of consolidation there are now three. Piracy and shifts in consumption patters have also greatly altered the music business. In 1999, the wholesale value of recorded music sales around the world was $28.6 billion, according to the International Federation of the Phonographic Industry; last year it was $16.6 billion.