About 2,000 staffers worldwide will be let go as a result of the Sony Music-BMG merger, sources said. The combined company is expected to reap cost savings of $300 million-$360 million a year, accordi
About 2,000 staffers worldwide will be let go as a result of the Sony Music-BMG merger, sources said. The combined company is expected to reap cost savings of $300 million-$360 million a year, according to industry insiders.
The European Union's antitrust division is expected to officially announce approval of the merger as soon as tomorrow (July 20). The international restructuring of Sony BMG is expected to be complete by June 2005 and will mostly affect back-office operations, sources said.
Representatives from Sony and BMG declined comment Friday.
The board of directors of the combined Sony BMG will comprise members of both companies. Andrew Lack, chairman and CEO of Sony Music Entertainment, will helm the merged company as CEO, with BMG chairman and CEO Rolf Schmidt-Holtz serving as the chairman of the board.
News that EU antitrust chief Mario Monti would approve the merger leaked last month.
The EU's main concerns, according to the antitrust office's sealed 51-page statement of objections, have been fixed pricing on CDs and market collusion. Only four years ago, the EU opposed a deal between EMI and WMG for the same reasons.
Insiders said Monti's decision to allow the union of Bertelsmann AG and Sony Corp.'s music divisions came after the commission concluded that the evidence of price collusion and market dominance was not solid enough to justify blocking the merger.
If the merger is passed by U.S. regulators, the combined Sony BMG would be the world's second-largest music company, behind Universal Music Group.
The new entity will be 50%-owned by both groups and based in New York. The merger includes both companies' recorded music businesses but not music publishing, physical distribution or manufacturing operations. Sony's recorded music business in Japan, SMEJ, also would be excluded.