EU Approves BMG / Sony Merger - musicNEWS

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07-19-04
. The European Union has unconditionally approved the merger of BMG (Bertelsmann Music Group) and Sony Music, paving the way for the world’s second largest record company.  The estimated revenue of the new Sony BMG will between 4.5 billion and $5 billion putting it right behind Vivendi Universal Music. 

The announcement came from the involved companies on Monday, a day before the EU is expected to make the formal announcement. Certain portions of the original companies will not be included in the merger, including each company’s publishing arms, Sony’s Japanese unit or Sony’s CD manufacturing branch. 
Current BMG Chairman and Chief Executive Rolf Schmidt-Holtz will become the chairman of the new company, which will be named Sony BMG.  Sony Music Entertainment Chairman and CEO Andrew Lack, will become CEO. 

Now that the merger has gained EU approval, they still have to receive approval from the U.S. Federal Trade Commission.  Although the FTC has not confirmed that they are even looking at the proposed merger, there are reports that BMG has worked closely with the agency and they expect an decision soon, maybe as soon as this week. 

The Hollywood Reports cites sources which said that merger will mean the loss of an estimated 2000 jobs worldwide. The paper states that industry insiders have speculated that the cost savings from letting these staffers go will be between $300 million-$360 million annually. 
 

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