Hong Kong-based Typhoon has bought out EMI Music's stakes in two Hong Kong-based joint ventures and has bought EMI Music Taiwan, dramatically downsizing EMI’s physical Chinese presence.

EMI has agreed to sell its stakes in joint venture companies in China and Hong Kong to Typhoon, the company headed by industry veteran Norman Cheng, formerly EMI Music Asia chairman. Since 2003, the companies had been partners in the Hong Kong-based record label Typhoon Music and label/artist management company Gold Label.

EMI has also sold EMI Music Taiwan to Typhoon. Under the new arrangements, Typhoon will be EMI Music's exclusive licensee for physical distribution of international repertoire in China and Taiwan, while EMI has the option to release Typhoon artists internationally. Typhoon also becomes a non-exclusive licensee for EMI digital repertoire in China and Taiwan.

Although the terms of the deal were not disclosed, Billboard.Biz understands that EMI has the option to buy back its stake in the companies at future dates. In the region, EMI Group retains control of its EMI Music Hong Kong arm.

"We are delighted to have renewed our agreement with Norman Cheng who is the most successful pioneer in the Asian record business," said EMI Music president and COO Chris Roling in a statement. "Chinese music is a very exciting emerging market with longer term growth potential -- particularly in digital -- but still with economic and other challenges such as high rates of piracy. This new corporate structure will allow us to reduce our cost base while providing EMI Music's international artists with a market-leading partner for the release of their music in the PRC and Taiwan."

"I am pleased to be able to announce this new development which sees Typhoon continuing to work closely with EMI and its international artists in the PRC," said Norman Cheng in a statement. "It provides Typhoon with the unique opportunity of now looking at the entire Greater China region and realizing the potential that it offers artists -- both Chinese and international -- and consumers everywhere. Yes, these are challenging times for the global music industry, but with consumers listening to and having more access to music than ever before, it presents many of us, especially in the PRC, with great new business and artistic opportunities."

Typhoon and Gold Artists affected by the deal include Taiwanese pop acts Jolin Tsai and A-mei, along with Hong Kong singer Ronald Cheng, who is the son of Norman Cheng. EMI was unable to comment on whether the deal would result in job losses.