EMI-UNIVERSAL MERGER

EMI-Universal deal cleared by EU and US regulators

[Module name and code]

[Assessment name]

[Date of submission]

[Student number]

[Tutor]

Strategic Analysis & Planning - EMI-Universal deal cleared by EU and US regulators

The case event and the main organisations that feature in the situation

The Group of Universal Music won the approval from European and American regulators for buying the famed music company of British known as EMI, together with the immensely lucrative catalogue of Beatles. But the Europe imposed some rigorous restrictions on the deal in order to force the Universal for selling some of the biggest acts of EMI, such as Pink Floyd and Coldplay. Among the assets of EMI that must carry on is Parlophone, which is home to such two bands of British as well as David Bowie and Kylie Minogue. The part of the Parlophone, the Beatles was exempted. Universal will also need to sell off some of the classical music divisions of the EMI, its several other branches inclusive of French and other labels that are house to The Ramones and Depeche Mode (BBC News, 2012).

The Fed Trade Commission of the United Stated said about this that EMI and the Universal businesses were distinctive enough from each other and the deal was not anti-competitive. It also added that it did not consider the requirement for imposing the similar circumstances on the deal as it was done by the regulators of Europe because there are discrepancies between the markets of U.S. and EU (Kanter, 2012).

The Competition Commissioner of Europe, Joaquin Almunia said that this reality about the companies who involved music trade made the case a typical emotional one. This has been among one of the most complicated discussions in his point of view as the Competition Commissioner. He stated the reason of complexity as the existence of an industry that is used to deal with mergers between several companies in truly distinctive sectors, but there is obviously some presence of the dimensions of culture (Masnick, 2012).

The decision of the FTC was the least obstacle about Universal which already symbolizes Nirvana, Jay-Z, and U2, and it was required to clear up its purchases of $1.9 billion of recorded music divisions of EMI before going ahead. The rivals of the Universal, such as small self-regulating labels, and Warner Music, have powerfully protested that deal by saying that it could compress out several other players as well. The chairperson of Impala, which is a group of industry for self-governing labels, Helen Smith, said at that event that this decision has eventually put a ban on the ability of the Universal for expanding further. Though, this decision nevertheless strengthens what is previously an influential duopoly (Lawless, 2012).

Although, the Commissioner of Europe said in this regard that its ruling would alleviate the fears of competition, and the music labels of rival have condemned the shift. The deal of the Universal is one component of the EMI break up. Regulators have already permitted a group which was led by the Sony Corporation for buying the ...