Europe’s competitors watchdog – the European Fee – revealed in April that it was getting ready to examine Common Music Group‘s proposed acquisition of Downtown Music Holdings.
UMG was required to formally notify the EU in regards to the deal, which might kickstart a Section 1 investigation, on the finish of which we’ll discover out if the deal has been accredited or raises critical competitors issues.
We gained’t have lengthy to attend.
An replace filed by the regulator on Monday (June 16) confirms that UMG has notified the EC in regards to the deal. The EC has set a provisional deadline of July 22 to make its resolution within the Section 1 investigation.
UMG’s Virgin Music Group revealed in December that it had agreed to purchase Downtown Music Holdings LLC in a $775 million deal.
The UMG-Downtown deal didn’t meet the EU’s normal turnover thresholds that might usually require notification to Brussels, bit it did set off notification necessities in each the Netherlands and Austria primarily based on their respective nationwide thresholds.
The EC determined to look into the deal as a result of the Netherlands triggered a authorized mechanism in EU competitors regulation referred to as Article 22. Austria subsequently joined the referral.
The competitors authority has 25 working days to conduct its Section 1 investigation, inspecting whether or not the alleged “focus” raises critical competitors issues.
The formal Section 1 notification interval represents a vital milestone within the regulatory course of.
If the Fee identifies critical competitors issues throughout its preliminary assessment of the proposed deal, the case may progress to a extra in depth Section II investigation lasting as much as 90 working days.
In accordance with European Fee statistics, “greater than 90% of all instances are resolved in Section I, usually with out cures,” which means that lower than 10% of instances proceed to Section II.
On the conclusion, the Fee can both clear the merger (with or with out situations), or prohibit it completely if competitors issues can’t be adequately addressed.
Learn MBW’s current Article 22 explainer for an in depth breakdown of how the investigation course of works.
The acquisition would considerably develop UMG’s artist and label providers capabilities by Virgin Music Group, including Downtown’s portfolio of firms together with FUGA, CD Child, and Curve Royalty Techniques to Common’s international operations.
“We’re assured that we are going to shut this acquisition within the second half of the yr, on its authentic timeline.”
UMG assertion issued in April
Impartial label representatives have criticized UMG’s proposed deal to purchase the corporate. In April, Brussels-based IMPALA, which represents over 6,000 impartial music firms in Europe, welcomed the European Fee’s resolution to research the proposed deal.
UMG stays assured in regards to the deal’s prospects, stating in April: “We stay up for persevering with to co-operate with the European Fee within the weeks forward. We’re assured that we are going to shut this acquisition within the second half of the yr, on its authentic timeline.”Music Enterprise Worldwide
