British music company EMI has reportedly been split up and sold to two separate groups for a sum of $4.1 billion. A Sony-led group will acquire the publishing operation for $2.2 billion while Universal Music Group will obtain EMI's recorded-music division for $1.9 billion, says The Wall Street Journal.
The fourth largest record label in the recording industry was taken over by Citigroup in February 2011 after the company was unable to pay $4 billion in debt. The financial services company put EMI up for sale in June and has been weighing bids since. It was believed by many in the industry that KKR and Bertelsmann AG would win the publishing rights and Warner Music Group would acquire the recorded-music arm.
The WSJ reports that Citigroup had been asking $4 billion for EMI but most analysts thought the asking price was too high and they might even settle for less based on the state of credit markets and the music industry as a whole.
The next step in the process requires regulatory approval which could take 10 to 20 months. Universal Music is expected to sell nearly $700 million in non-core assets to appease investors and antitrust authorities. If unsuccessful, Universal Music would have to resell their share and absorb any losses.
EMI Music was founded in 1931 and is currently home to the Beatles collection, Katy Perry and Coldplay. It's still too early to determine how all of this will eventually play out and what effect it could have on the music industry and how listeners acquire songs in the future.