Brazil’s competition regulator has approved Sony Music Entertainment’s $255 million acquisition of Brazilian label Som Livre from Grupo Globo, clearing the way for Sony to close the deal next week.
The Tribunal of the Conselho Administrativo de Defesa Econômica (CADE), which reviews proposed acquisitions in Brazil, said its analysis of the deal showed there would be “low market concentration and low barriers to entry” from the combination, despite Sony already being the leading label in recorded-music sales in Brazil and Som Livre being third behind Universal Music Brasil.
The approval clears the way for Sony to close the deal, which is expected on March 4, a Sony spokesperson tells Billboard.
Sony announced the acquisition last April, ending months of speculation about who would win the competition for Brazil’s largest domestic label, which has one of the country’s most valuable music catalogs. Som Livre’s repertoire encompasses Brazilian genres such as sertanejo, pagode, funk and forró.
Rio de Janeiro-based Grupo Globo, a mass media conglomerate, decided in 2020 to sell the label as part of an organizational restructuring. All the major labels showed interest in buying Som Livre, but Universal did not make a “serious bid” for the label, one person familiar with the matter told Billboard last year.
Som Livre will benefit from Sony’s marketing and distribution muscle worldwide. The Orchard had previously distributed the Brazilian label. Sony has said Som Livre will continue to operate independently and that Marcelo Soares, who has run the label since 2007, will stay on as CEO.
Som Livre artists had five out of the top 10 songs in Brazil in 2020, according to the IFPI 2021 Global Music Report. They included Henrique and Juliano’s “Liberdade Provisória,” the No. 1 streaming track in Brazil in 2020. Songs produced by Som Livre also accounted for 20% of streams of the top 200 songs played on digital platforms in Brazil in 2020, a Globo spokesperson previously told Billboard.
Som Livre confronted tragedy in November, when one of its biggest sertanejo stars, Marilia Mendonça, died in a plane crash while heading to a show. Despite her death, the label controls Mendonça’s catalog, which includes two collaborative studio albums, four live albums and 14 singles. She won the Latin Grammy for Best Sertaneja Album in 2019 for Todos Os Cantos.
Founded in 1969 by music producer João Araújo, Som Livre initially focused on releasing soundtracks for Globo’s soap operas and continued to specialize in compilations. A decade ago, the label shifted its strategy to developing and managing artists and became the largest producer of music in Brazil, where local music represents almost 70% of total consumption.
With the acquisition, Sony becomes an even more dominant player in the world’s 10th largest music market. While Sony has been the market leader, Som Livre has trailed only Universal in music sales, with Warner Music in fourth place, according to Valor Econômico, a Brazilian business publication.
Brazil’s recorded music revenues grew by 24% to $306.4 million in 2020, with streaming shooting up by 84% to $256.6 million, according to IFPI.