Warner's Parlophone acquisition approved in Europe

Warner's Parlophone acquisition approved in Europe

Warner Music Group's £487 million acquisition of Parlophone Label Group has this morning been fully approved by European regulators.

The decision is effectively the final global approval Warner required in the West, after the deal was approved in the US and Brazil last month. Warner owner Access Industries outbid rivals such as BMG and Sony to the deal in February.

Previously owned by EMI Music, PLG was a forced divestment from Universal Music Group's (UMG) £1.2bn acquisition of its fellow major label last year.

Although its catalogue did not comprise recordings from the most famous Parlophone artist, The Beatles - whose rights are now owned by Universal - the Parlophone catalogue includes gems such as Pink Floyd, David Bowie and Blur. Modern-day artists signed to Parlophone include Tinie Tempah and Coldplay.

Warner has commited to launching Parlophone as an active, frontline operating label within its group, alongside Warner Bros Records and Atlantic in the UK. It has also acquired Virgin Classics and EMI Classics as part of the deal - and has commited to launching a new classical brand in future, utlising this catalogue.

The major has planned £45m in annual cost-savings as it integrates the PLG business into its own.

The EU said in a statement that: "The Commission's investigation confirmed that the proposed transaction would not raise competition concerns, in particular because following the acquisition, WMG will continue to face competition from the two remaining major music companies, namely Universal Music Group (UMG) and Sony, as well as from independent music labels.

"The Commission's investigation showed that WMG has limited market shares and that the increment in market share deriving from the proposed acquisition is rather limited in most of the affected territories. The investigation also showed that following the transaction, WMG will continue to face competition from the two other majors, as well as from independent music labels. The Commission therefore concluded that the proposed transaction would not have anti-competitive effects in any of the affected markets.

"Moreover, a number of respondents to the market investigation pointed out that the proposed transaction may actually reinforce competition, as it may lead to an increase of the competitive pressure exercised by WMG on both UMG and Sony."

Warner Music Group CEO Steve Cooper said: "With today’s EC clearance, we are an important step closer to combining WMG and PLG - two companies that have continually built upon their incredibly rich musical heritage by remaining at the forefront of artist development. We look forward to the transaction closing in a few weeks so our work together can begin in earnest.”

Warner announced its Q2 fiscal results yesterday, with $2m profit posted in the three months to March 31, 2013.

Former chairman Edgar Bronfman Jr. exited the company's board of directors last night.


Tags: Parlophone, Warner Music Group, Parlophone Label Group

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