As predicted on Thursday, Universal Music Group on Friday submitted its long-delayed divestment package for its proposed acquisition of EMI's recorded-music division to the European Commission, moving the process one big step closer to a conclusion.
Now, the Commission will turn around and market-test that package with UMG's competitors and other interested parties to get their take on whether the UMG proposals goes far enough to address concerns that UMG's market share will give it the power to be the industry's gatekeeper.
At presstime, it was unclear if the EU would begin market testing it today because sources said they hadn't yet heard from the Commission, but several hours still remain in the work day in Europe. If the EU waits until Monday to provide the package of proposals, competitors likely will be given five days to respond.
The announcement came just hours after news broke that BMG Rights Management is in talks with UMG to purchase the European rights to EMI's legendary Parlophone label as part of the remedies package of assets to be divested. A source told Billboard.biz late Thursday that the move took the Virgin and EMI imprints out of the total number of assets to be divested, although what exactly is in the package was unconfirmed at press time. The source added that the addition of Parlophone seemed likely to satisfy the EC's divestment demands -- and while this morning's news suggests that may have been the case, the process is far from over.
"Universal Music Group has submitted a package of remedies to the European Commission relating to its proposed acquisition of EMI Recorded Music," the press release reads. "We believe the package fully addresses the Commission's concerns and follows our constructive discussions with regulators, independent labels and competitors. We look forward to working further with the Commission and are confident of receiving clearance."
Parlophone's roster includes Coldplay, Gorillaz, Blur, Kylie Minogue and of course the Beatles, although sources say UMG is not likely to give up the Beatles' catalog.
The source also claimed that more than 20 "well-financed" suitors are interested in the divestment properties, including a dozen indie labels, half a dozen major VC companies, and Sony Music - but not Warner Music, who has not contacted UMG about any of the labels that may be up for sale. A rep for Warner contacted by Billboard.biz declined to comment on the claim, but other sources said there is no doubt WMG will be at the table for whatever EMI assets are being auctioned.
Billboard.biz will have more on this situation as it develops. See Ed Christman's Universal/EMI Deal Looks Likely to Be Approved, But at What Cost to UMG? for an exhaustive overview of the deal's many movements over the past few weeks.