Japanese entertainment giant Sony on Tuesday announced a deal to acquire the music publishing firm and record label EMI for a price of around $2.3 billion. Sony signed a deal with Abu Dhabi-based investment firm Mubadala to buy its 60% holding in EMI, giving the Japanese firm an indirect stake of approximately 90%.
According to the press release, the original transaction and the investor group that partnered with Sony and the Michael Jackson Estate to acquire EMI Music Publishing from a wholly-owned subsidiary of Citigroup Inc. were sourced and assembled by Mubadala Capital’s private equity business. This has controlled and managed EMI Music Publishing on behalf of Mubadala and other third-party investors since 2012.
Sony Corporation President and CEO Kenichiro Yoshida said,
“We are thrilled to bring EMI Music Publishing into the Sony family and maintain our number one position in the music publishing industry. I would also like to convey my gratitude to Mubadala, our equity partner in EMI Music Publishing, for sharing our long-term perspective on the potential success of music publishing and their support as we grew the business.”
Sony will also take on EMI’s gross existing debt totaling about $1.359 billion. Sony already holds a 40% stake in DH Publishing, with the remainder owned by the Mubadala-led fund. Sony expects the acquisition to add $100 billion to its operating profit for the fiscal year ending March 2019.
Head of Mubadala Capital Hani Barhoush commented,
“EMI has been a successful investment for Mubadala and I would like to personally extend my appreciation to the leadership at Sony and Sony/ATV, who have been instrumental in administering the EMI catalog as well as shaping the music landscape on a global basis. They have been tremendous partners to us.”
Over the past six years, Mubadala and Sony have worked together as partners to create value alongside Sony/ATV Music Publishing (“Sony/ATV”), Sony’s music publishing arm, which has been managing the EMI Music Publishing catalog’s legacy of iconic writers and artists, reinvesting in existing writer relationships and growing the catalog by signing new writers on a 50/50 basis with Sony/ATV. These actions, coupled with the global rise of streaming and paid streaming services, have led to an appreciation in value of the EMI Music Publishing catalog as millions of consumers have been provided access to innovative distribution channels to enjoy music like never before.
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