Under the deal, announced today by UMG chairman and CEO Lucian Grainge and Billabong CEO Derek O'Neill, the two companies will develop initiatives such as premium audio/visual content, live events, music compilations, sports and music merchandise, download offers, preloaded audio/visual hardware, streaming radio and TV and a dedicated music service.

It is intended to help both companies to tap into changing youth culture appetites for entertainment and action sports.

Grainge explained that the two companies share "a passion for creating ...