EC sets provisional deadline.
Vivendi's Universal Music Group should learn whether the European Commission approves its purchase of BMG Music Publishing by Dec. 8, the provisional deadline set by the EC to issue its ruling.
UMG successfully bid on BMG in an invitation-only auction, offering €1.63 billion ($2.05 billion). According to sources close to the deal, securing approval by competition regulators is the responsibility of UMG rather than Bertelsmann, the BMG parent corporation that sold the publisher.
Although the sale is subject to regulatory approval and other closing conditions, the purchase price is due before the end of the year.
Since the EC's approval of the Sony BMG Music merger was annulled by a European court earlier this year—forcing the EC to reconsider and rewrite its decision—it is expected that the Dec. 8 decision will be a statement of objections asking UMG for more information on its publishing acquisition. After a UMG response, the final EC decision should be made around April 2007. U.S. approval is in its second stage, according to a source familiar with the matter. A U.S. decision is expected by early 2007.
UMG attempted to "park" the BMG assets with a bank during the process rather than leave them under the control of Bertelsmann, but the EC refused that request last month, according to a source. For now, the two publishing companies continue to be run as separate entities. Until regulatory approval, all revenue generated by BMG will go to Bertelsmann.