Sony has completed its US$2.3 bn acquisition of EMI Music Publishing according to an SEC filing posted on November 14.
The deals will allow to properly merge the Sony/ATV and EMI publishing companies, creating a true music publishing powerhouse.
According to the SEC filing, Sony has also assumed EMI’s existing interest-bearing debt of approximately $1.3bn as a result of the acquisition, of which $960mn was repaid immediately from Sony’s existing cash.
As a result of this acquisition,
“Sony expects to record additional operating income of approximately 105 bn Yen, representing a non-cash step-up gain for the approximately 40% equity interest in EMI that Sony already owned and reflecting costs relating to the acquisition, in the Music segment in the third quarter of the fiscal year ending March 31, 2019. Sony also assumed EMI’s existing interest-bearing debt of approximately 1.3 bn U.S. dollars as a result of this acquisition, of which 0.96 billion U.S. dollars was repaid immediately from Sony’s existing cash.”, the company said in a statement.
The expected impact of this transaction on Sony’s consolidated results has already been incorporated into the forecast for consolidated financial results for the fiscal year ending March 31, 2019, as announced on October 30, 2018.
Earlier this year, Sony confirmed that it had agreed to buy most of those investors out of the EMI business. Those investors controlled about 60% of EMI Music Publishing and were led by an entity called the Mubadala Investment Company. The remaining other investor was the Michael Jackson Estate, which then also agreed to sell its shares to Sony.
Sony already owns 30% in EMI Music Publishing and is buying the final 10% from the Jackson Estate for $287.5mn. The remaining 60% equity interest in EMP has been acquired from an investor consortium led by Mubadala Investment Company for the equity purchase price of $2.3bn, based on an enterprise value of $4.75bn.
Sony led an association of investors to buy the EMI Music Publishing company back in 2012. Sony’s own music publishing business, Sony/ATV, was then appointed to administrate the rights of the EMI songs catalogue.