By Yinka Adegoke
NEW YORK, May 25 (Reuters) - Universal Music Group, the world’s largest music company, said on Friday it closed its $2.19 billion acquisition of BMG Music Publishing, which means it can begin to sell off some European publishing rights as directed by regulators.
European regulators cleared the deal earlier this week after Universal, owned by French media group Vivendi (VIV.PA), agreed to sell off the European rights to a group of high- profile catalogues. The catalogues that must be divested are Zomba UK, 19 Music, 19 Songs, BBC music publishing and Rondor UK, which hold the European publishing rights to Justin Timberlake, R.Kelly, Kaiser Chiefs and other artists.
After the acquisition, Universal Music Publishing Group becomes the largest music publisher in the world and has access to thousands of song rights by artists, including Coldplay, Christina Aguilera and Barry Manilow. These add to songs penned by the likes of Mariah Carey, Paul Simon, Prince and Ludacris.
Music companies around the world are struggling with dwindling recorded music sales as consumers move from buying compact discs to digital songs. Rampant piracy in both physical and digital formats has also had a debilitating effect on sales in recent years.
But music publishing is increasingly coveted by investors who like its steady cash flow and stability. Unlike other parts of the music business, music publishing is less reliant on the vagaries of consumer habits as revenues can also come from diverse sources, such as live-play, television, radio and advertising among others.
Major record companies, including Sony BMG Music Entertainment, Sony/ATV Music Publishing and Warner Music Group’s WMG.N Warner/Chappell Publishing have all talked about growing their repertoire of songs rights.
In the week since the third-largest music company, EMI Group Plc EMI.L, opened its books to potential buyers, investors have shown great interest in EMI Music Publishing, previously the biggest music publisher before Universal bought BMG Publishing.
((Reporting by Yinka Adegoke; editing by Andre Grenon; e-mail:firstname.lastname@example.org Reuters Messaging: Yinka.email@example.com; +1 646 223 6081)) Keywords: UNIVERSAL BMG/
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