Brussels-based IMPALA, which represents over 6,000 unbiased music corporations in Europe, has welcomed the European Fee’s choice to analyze Common Music Group‘s proposed $775 million acquisition of Downtown Music Holdings.
“We welcome this information and stand able to collaborate absolutely with the European Fee all through its evaluation of the merger,” mentioned Helen Smith, IMPALA Government Chair.
The probe was triggered by requests submitted by Austria and the Netherlands to evaluate the deal that may see UMG’s Virgin Music Group take management of Downtown’s portfolio of music companies.
“The size of disruption throughout Europe means it’s proper for the EU to do the evaluation. This follows considerations raised by each regulators who had been notified by UMG and Downtown at nationwide stage,” Smith mentioned in an announcement on Friday (April 25).
UMG, nevertheless, maintains that the deal stays on observe to finish later this 12 months regardless of going through regulatory scrutiny.
“We look ahead to persevering with to co-operate with the European Fee within the weeks forward. We’re assured that we are going to shut this acquisition within the second half of the 12 months, on its authentic timeline,” UMG mentioned in an announcement issued to MBW.
The Fee’s choice to examine comes after considerations raised at nationwide stage, based on Smith.
In its announcement on Friday (April 25), the EU regulator cited considerations that “the transaction threatens to considerably have an effect on competitors in sure markets of the music worth chain, the place each corporations are lively, in Austria and within the Netherlands, in addition to in lots of different Member States.”
“We’re assured that we are going to shut this acquisition within the second half of the 12 months, on its authentic timeline.”
Common Music Group
“The Fee has due to this fact concluded that it’s best positioned to look at the transaction. The Fee has requested UMG to inform the transaction,” it mentioned.
IMPALA argued that the Downtown acquisition is a part of UMG’s broader sample of acquisitions together with its current purchases of [PIAS] and 8Ball Music. The group had earlier accused UMG of committing a “land seize” within the indie sector, and is now characterizing UMG’s strikes as a “’juggernaut’ technique of serial acquisitions rolling up strategic companies and pushing its streaming agenda onto DSPs.”
The group famous that the EU investigation represents them most vital regulatory hurdle for UMG after the Fee banned UMG from making a variety of offers in Europe in 2012 following its acquisition of EMI Music. The Fee on the time required UMG to divest Parlophone Label Group, excluding The Beatles catalogue.
“Contemplating market developments because the EC stripped UMG again in 2012, and all of the proof accessible at this time, we consider the EC is more likely to conclude that the utmost it already set, which can have appeared cheap to some, would now be thought of lenient as IMPALA argued on the time and that treatments simply don’t work within the fashionable music market,” IMPALA mentioned.
Downtown’s portfolio of companies — together with FUGA, Downtown Artist & Label Companies, Curve Royalties, CD Child, Downtown Music Publishing and Songtrust — serve over 5,000 shoppers and greater than 4 million creators in 145 nations.
“Like every sector, the music market wants massive corporations after all, as we already flagged, there may be merely some extent at which massive is just too massive. On this case, UMG clearly exceeded the utmost even earlier than including Downtown.”
Helen Smith, IMPALA
Francesca Trainini, IMPALA President and Vice President of Italian affiliation PMI, mentioned, “This deal has far-reaching implications not just for report labels but additionally for music publishers, distributors, and different sectors. It’s the form of acquisition habits that raises speedy crimson flags for any regulator.”
“We urge the European Fee to conduct an intensive investigation and take decisive motion to stop additional consolidation that might hurt shoppers in addition to competitors, range, and innovation throughout the music ecosystem.”
Gee Davy, CEO of the UK’s Affiliation of Unbiased Music, highlighted some considerations raised by Ruth Barlow, Chair of AIM, in an op-ed revealed on MBW about two weeks in the past. “This isn’t only a problem for unbiased labels; it’s an existential menace to creative range, truthful competitors, and the music panorama itself,” Barlow mentioned within the article.
“The information concerning the EU exhibits the way in which for different jurisdictions to intervene. We name on the UK to comply with, given the significance of the music market to the UK economic system. The music sector deserves to stay revolutionary and accessible to all,” mentioned Davy.
Common’s confidence that the deal will proceed as deliberate suggests the corporate could also be ready to deal with regulatory considerations. Nonetheless, IMPALA’s Smith mentioned, “Like every sector, the music market wants massive corporations after all, as we already flagged, there may be merely some extent at which massive is just too massive. On this case, UMG clearly exceeded the utmost even earlier than including Downtown. This deal have to be blocked fully.”
Music Enterprise Worldwide
