French media and telecoms group Vivendi is to buy the BMG music publishing division of Germany’s Bertelsmann for 1.63 billion euros.
BMG owns the copyright to over one million pieces of music by recording artists such as Coldplay, Christina Aguilera, Robbie Williams, Justin Timberlake, the Beach Boys and Barry Manilow.
The purchase means Vivendi’s Universal Music Group will become the world’s largest music publisher.
It will also be the largest recording company with 37% of the market. Sony has 14%, EMI has 12%, Warner has 11.9% and independent companies account for the other quarter of market share.
Bertelsmann has said it is confident that the deal will be approved by European and US competition authorities as the publishing business does not directly affect consumers.
The competition issue is crucial as a European court recently annulled the 2004 merger of Sony and BMG’s music recording businesses following
a complaint by a group of independent labels.
Proceeds from the sale will go towards reducing the 4.5 billion euros of debt Bertelsmann raised in order to buy back a large stake in the company, held by Groupe Bruxelles Lambert.
Bertelsmann also announced that it will pay Vivendi 47 million euros to settle a law suit relating to file-sharing service Napster.