Sony to Purchase Bertelsmann's 50% Stake in Sony BMG; Music Company to Become Wholly Owned Subsidiary of Sony Corporation of America
Tokyo, Aug 05, 2008 (JCN Newswire via COMTEX) -- The international media and entertainment companies Sony Corporation and Bertelsmann AG today announced that Sony has agreed to acquire Bertelsmann's 50% stake in Sony BMG. The music company, to be called Sony Music Entertainment Inc. (SMEI), will become a wholly owned subsidiary of Sony Corporation of America. Sony and Bertelsmann AG originally created the Sony BMG joint venture in August 2004.
"Music has been a vital and vibrant part of Sony's culture for over twenty years. This acquisition will allow us to achieve a deeper and more robust integration between the wide-ranging global assets of the music company and Sony's products, operating companies and affiliates. It enables us to offer a total entertainment experience to consumers," said Sir Howard Stringer, Chairman and CEO, Sony Corporation. "Over the past four years, Sony BMG has undertaken a very successful restructuring, streamlined operations and developed innovative digital partnerships that ensure it will continue to be a leader in the creation and distribution of music worldwide. It is an organization rich in talent, ideas and enthusiasm, and is a strong fit with our overall business strategy."
"After a careful and thorough review, we made the strategic decision to sell our investment in this joint venture to Sony, a step that we believe will benefit the stakeholders of both our companies," stated Hartmut Ostrowski, Chairman and CEO of Bertelsmann AG. "This move is consistent with our new growth strategy and will enable us to focus on our defined growth areas. Sony has been an excellent partner, and they are the right company to take this business to the next step and ensure that it realizes its full value and potential. We look forward to witnessing Sony Music Entertainment's exciting future under Sony's ownership."
Once the transaction is completed, SMEI will be comprised of premier music labels such as: Arista Records, Columbia Records, Epic Records, J Records, Jive Records, RCA Records, and Zomba. Key recording artists will include Celine Dion, Alicia Keys, Yo-Yo Ma, Bruce Springsteen, Justin Timberlake, Usher and Jay Chou.
As part of the transaction, the parties have also agreed to continue to share the company's manufacturing and distribution requirements between Sony's manufacturing subsidiary, Sony DADC, and Bertelsmann's services company, Arvato Digital Services GmbH ("Arvato"), by extending the agreements with Arvato for additional terms of up to six years. In addition, Bertelsmann will be taking over selected European music catalog assets from Sony BMG.
Consummation of the transaction remains subject to a number of conditions, including approvals of regulatory authorities in certain jurisdictions.