UPDATE 1-EU approves Vivendi Universal's buy of BMG unit

(Adds Universal reaction, detail, background)

BRUSSELS, May 22 (Reuters) - Vivendi's (VIV.PA) Universal Music won conditional approval from the European Commission on Tuesday to buy BMG Music Publishing for 1.63 billion euros

($2.19 billion), making it the world's largest music publisher.

"The Commission found that the proposed merger, as initially notified, raised serious doubts as regards adverse effects on competition in the market for music publishing rights for online applications," the European Union's executive said.

"However, the Commission's investigation found that these concerns would be removed by the remedies package proposed by the parties concerning the divestiture of a number of publishing catalogues," it said in a statement.

Vivendi overcame opposition from independent music publishing group Impala, which had convinced a court to annul the Commission's approval of a merger of two music producers.

"We are delighted that the European Commission has approved our acquisition of BMG Music Publishing," said Doug Morris, chairman and chief executive of Universal Music Group.

Under the approval on Tuesday, Universal will have access to thousands of song rights of BMG Music Publishing, including artists such as Coldplay, Christina Aguilera and Barry Manilow.

Universal has committed to divest a number of important catalogues, covering Anglo-American copyrights and contracts with authors, catalogues containing successful artists such as the Kaiser Chiefs, Justin Timberlake and R. Kelly, the Commission said.

Universal will divest the rights within the 30-member European Economic Area, which includes the European Union.

The catalogues to be divested are Zomba UK, 19 Music, 19 Songs, BBC music publishing, Rondor UK as well as an EEA licence for the catalogue of Zomba US.

MARKET SHIFT

The Commission said the divestitures were designed to deal with a shift in the market. In the past, rights were licensed through a collecting societies system operating in individual countries.

But the market has shifted to EEA-wide licences, a move supported by the European Commission.

The Commission said it had been concerned that Universal would have "the ability and the incentive to increase prices for online rights as regards Anglo-American repertoires".