BMG Buys Zomba Music in $3B Deal

Back - Index - Submissions - - What is RSS? Date: Jun 12, 2002 Source: Yahoo! News Submitted By: Cassi FRANKFURT, Germany (AP) - Zomba Music Group, the record company of Britney Spears, 'N Sync and the Backstreet Boys, is exercising an option to sell out to BMG, the music division of German media conglomerate Bertelsmann AG. Guetersloh-based Bertelsmann, which already holds a minority stake in Zomba, will buy the shares it doesn't already hold from majority owner Clive Calder, according to a joint statement released late Tuesday. A price for the purchase wasn't announced by the companies, both of which are privately held. The Wall Street Journal and Financial Times reported that the price was around $3 billion. Bertelsmann officials couldn't immediately be reached Wednesday. Bertelsmann's BMG Entertainment already distributes Zomba's recordings in the United States and Canada. It would acquire full ownership of Zomba — the world's largest independent record company — at a time when the music business as a whole is facing falling record sales blamed on illegal copying of compact discs and digital piracy. But Bertelsmann can afford the deal, having reaped $6.75 billion for the sale of its stake in AOL European arm to AOL Time Warner. "With the acquisition of Zomba's music business, Bertelsmann will strengthen its global market position for the long term," Bertelsmann said. BMG, smallest of the big five record companies, has tried to expand by merging with competitor EMI but was blocked by antitrust authorities. Bertelsmann bought a 25 percent stake in Zomba's music publishing business in 1991 and a 20 percent stake in its recording unit in 1996, the company said. The sale is subject to approval by antitrust authorities and to final review by the companies. Zomba's other artists include R. Kelly, the R&B star currently under indictment on charges of child pornography, Weird Al Yankovic and Michael Bolton. Comment on this item. Recent Comments Submitted by: snymrik Submitted by: bezdar1 Submitted by: cirkyl Comment on this item. Next Item: JWR to Attend Charity/Fan Convention Prev Item: Local 6 News Helps In Battle Against Lupus