* Parlophone is one of EMI's most prized label
* EU Commission will decide whether to clear deal by Sept 27
By Yinka Adegoke and Foo Yun Chee
NEW YORK/BRUSSELS, July 27 Vivendi SA's
Universal Music Group has offered to sell the bulk of EMI
Music's most valuable record label, Parlophone, to try to get EU
clearance for its planned $1.9 billion buyout of EMI, three
sources familiar with the matter said on Friday.
Putting Parlophone forward is a much bigger concession than
previously mooted to appease the European Commission, which has
warned Universal its plan to buy EMI's recorded music business
would hurt competition in a signal of a possible
One of EMI's most prized assets, Parlophone has stars such
as Coldplay and marquee acts such as Queen. It also has The
Beatles, but one source said Universal wanted to keep its rights
to one of the biggest selling bands of all time.
Universal, the world's largest recorded music company,
submitted its proposals to the EU antitrust watchdog on Friday.
"We look forward to working further with the Commission and
are confident of receiving clearance," a statement said.
EU competition policy spokesman Antoine Colombani confirmed
the regulator had received the proposal. Neither New York-based
Universal nor the Commission gave details of the proposed
One of the sources said the package consisted of Parlophone
but excluding The Beatles, the Chrysalis label without Robbie
Williams, EMI Classics, EMI France, EMI Norway, EMI Sweden, EMI
Poland, EMI Czech Republic, Jazzland in Norway, German jazz
label MPS Records, and the Mute and Sanctuary brands.
Universal would retain Virgin and EMI labels in Britain and
other EU countries not mentioned in the list.
Interested buyers include Virgin Records founder Richard
Branson, Patrick Zelnick who is the co-head of independent
labels lobbying group Impala and Sony Music, the source said.
The Commission will decide by Sept. 27, after feedback from
rivals and consumers, whether to accept the proposal and clear
the deal. A person familiar with the matter said regulators want
comments by early next week.
DANGERS OF SELLING PRIZED LABEL
That Universal is considering selling Parlophone could raise
new questions about a deal that has run into
firmer-than-expected regulatory resistance. It comes as
Universal's parent, Vivendi, is considering whether to sell
media assets that could include the music giant.
BMG, the music publishing joint venture between German media
giant Bertelsmann and private equity group KKR, has met
Universal and expressed interest in Parlophone, said one of the
sources, who declined to be identified because the discussions
But a third source said Universal had not offered to sell
Parlophone to BMG even though it was one of the interested
BMG and Bertelsmann declined to comment. News of the
Parlophone talks was first reported in the Financial Times.
Universal had earlier planned to sell three much smaller
music labels belonging to EMI -- Virgin, Chrysalis and EMI
Classics -- but buckled under pressure from the EU regulator,
which wants the combined company's market share below 40
A combined Universal-EMI would include a vast library of
current top-selling and legendary names including Jay-Z, Kanye
West, U2, Katy Perry and Pink Floyd.
The U.S. Federal Trade Commission is also examining the