Universal Music Group's proposed acquisition of EMI's recorded music division has passed another hurdle, albeit not the European Commission or FTC approval that the companies are so actively seeking. Today, the Canadian Competition Bureau signed off on the sale, following in the footsteps of Japan and New Zealand's regulatory committees who both approved the deal in the past month.
The CCB approved the $1.9 billion sale without requiring the concessions being sought by European regulators and other organizations which oppose the deal.
UMG released a statement today that closely resembled its measured response to the two previous approvals, saying, "We are pleased that the Canadian Competition Bureau has cleared Universal Music's proposed acquisition of EMI with no objections. This follows similar clearances in Japan and New Zealand. Our investment in EMI will create more opportunities for new and established artists, expand music output and consumer choice, and support new digital services. We welcome the Bureau's decision and will continue to work closely with regulators in other jurisdictions to obtain further clearances."
The deal is currently being reviewed by the European Commission, with Universal having submitted a divestment package July 27 which would see the company offload Parlophone minus the Beatles; Chrysalis minus Robbie Williams; Ensign; Mute; Sanctuary (UK only); EMI Classics; two jazz labels, Jazzland (Norway) and MPS (Germany); EMI European businesses including France, Belgium, Czech Republic, Norway, Poland, Portugal and Sweden; Universal Music's small Greek operation; and promise not to bid to renew its European licenses for the Disney, Hollywood, Ministry of Sound and Restos du Coeur labels. The concessions submitted were for Europe only.
The proposal apparently did not pass muster: UMG continued its discussions with the EC and began including talks of global rights in the concessions package, which could wind up shaking up the offered properties yet again before the EC were to sign off on the deal. The EU -- which has already market tested the package once -- may of may not do the same for the revised UMG package, but once the revised package is set and the market testing is done the EU still has to decide whether it will approve the acquisition.
According to guidelines, The EU has until Sept. 9 to make that decision, although it has the flexibility to extend that deadline. However, if the deadline is extended, payment for EMI is due on Sept. 10, which sources say could put UMG in the position of paying for its acquisition before it knows whether it owns the label or not.