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Impala: The EMI Acquisition Will Be 'Blocked Outright'...

Friday, November 11, 2011
by  paul

There's just one little problem with the planned purchases of EMI: they might not happen! According to a stern email just sent to Digital Music News by indie consortium Impala, a combination of Universal Music Group and EMI is highly likely to catch the ire of European regulators.  "Given that Brussels has taken a previous decision that Universal should not be any bigger, we would expect the sale to Universal to be blocked outright, even if it offers to increase the divestments it is prepared to make," said Helen Smith, Executive Chair of IMPALA.  "The same would apply to Sony if it buys EMI publishing."

This is Impala's moment to stir a tsunami, and Smith pointed to a board meeting in less than 10 days.  "Impala takes the view that even if Universal proposes to increase the £500 million divestments it is prepared to make, the deal will not be accepted," Smith continued.     

But wait: who cares about Impala, anyway?  Universal Music Group, Citigroup, Sony, and a bunch of investors that include David Geffen, that's who.  Impala is the group that successfully forced a second review of the Sony BMG joint venture in 2007, a massive distraction of paperwork, formalities, and government meetings.  The Sony BMG carriage pushed through those muddied tracks, though ultimately, the ill-fated handshake was canceled for broader reasons. 

Now, Impala is threatening a similar muscle-flex.  And before the ink was dry on the EMI negotiation, Impala promised to issue a strong challenge.  "The last time the European Commission looked at Universal, it ordered the company to sell off assets to cut it down to an acceptable size," the group continued.  "Since that decision, Universal has grown, which makes it even less likely that the regulators would accept any new acquisitions.

There's another piece of luggage in the baggage set: Live Nation.  After Universal Music announced a fairly substantial tie-up with the concert giant, Impala issued formal complaints with the European Commission.  So we'll just add this to the pile.

 



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