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Main >> News Listing >> December 2003 >> Article ID 3323
 Beyonce and Christina Together? | Type: Internet Article |
| | Bertelsmann, Sony Finalize Music Deal | Dec 12, 2003 | by Melissa Eddy
FRANKFURT, Germany - Beyonce and Christina Aguilera will be singing for the same label under a final merger agreement announced Friday by Bertelsmann AG (news - web sites) and Sony Corp (NYSE:SNE - news) (news - web sites)., which will create the world's second-largest music company.
As the music industry struggles with losses blamed on widespread file-swapping on the Internet, the two companies announced nearly a month ago their intention to merge their recorded music divisions.
Sony's music company is No. 2 in the world behind Universal Music Group, a part of Vivendi Universal SA, and Bertelsmann's BMG music division was No. 5.
The new company, which merges the record labels and music production, is to be called Sony BMG and will be equally owned by Sony and Bertelsmann, the two companies said in a statement.
"Sony and Bertelsmann share the vision that this merger is the basis for a company that will concentrate on the creative key business," Bertelsmann chairman Gunter Thielen said in a statement. "Our music business plays a key role for Bertelsmann and we believe in its future."
No other financial terms were released for the deal. The companies said the merger would not affect either company's music publishing businesses, CD and DVD productions, deliveries or Sony's Japanese music business.
The deal is subject to approval from regulators in the United States and the European Union (news - web sites).
"I am convinced that this merger will give us the possibility to create better products for consumers around the globe and to react more effectively to the needs of artists," said Andrew Lack, chief executive of Sony Music Entertainment.
Lack will lead the new company and Rolf Schmidt-Holtz, the chairman and chief executive of BMG, will serve as chairman of the board.
The merger will put some of music's biggest stars under a common corporate roof. Sony Music Entertainment's labels include Columbia, Epic, and Sony Classical, and it is home to pop artists including Bruce Springsteen, Beyonce Knowles and Celine Dion (news - web sites).
Among the stars on BMG's various labels are Dido, the Dave Matthews Band, Christina Aguilera, Alicia Keys, Avril Lavigne and Elvis Presley.
The deal could still could run into trouble from EU regulators, who blocked a deal between Warner Music and EMI three years ago, saying it could lead to an oligopoly of four firms controlling 80 percent of the European market.
But changes in the market may work in Sony and Bertelsmann's favor, antitrust lawyers have said, noting that with advances in the ability to download music over the Internet, the two could argue they need to be bigger to survive. |
 Source: Yahoo! News | |
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