On May 22, Japanese technology giant Sony announced it had signed a legally-binding memorandum of understanding to acquire a controlling stake in music publisher EMI.
The deal, worth roughly $2.3bn, cements Sony’s position as one of the world’s leading music publishers, giving the company access to a vast catalogue of more than two million songs from artists such as Queen, Kanye West, Sam Smith and Pharrell Williams.
Ownership of DH Publishing, which holds the majority stake in EMI, will be transferred to Sony from private equity firm Mubadala Investment Company. The purchase will increase Sony’s stake in the music publisher from 30 percent to around 90 percent, consolidating EMI as a subsidiary.
The $2.3bn deal will increase Sony’s stake in the music publisher from 30 percent to around 90 percent, consolidating EMI as a subsidiary
“We are thrilled to bring EMI Music Publishing into the Sony family and maintain our number one position in the music publishing industry,” said Sony CEO Kenichiro Yoshida in a statement.
“The music business has enjoyed a resurgence over the past couple of years, driven largely by the rise of paid, subscription-based streaming services. In the entertainment space, we are focusing on building a strong [intellectual property] portfolio, and I believe this acquisition will be a particularly significant milestone for our long-term growth.”
Yoshida was appointed to the top job in February, replacing Kazuo Hirai after a four-year stint as Sony’s CFO. The EMI deal reflects the new CEO’s intent to shift the company’s strategy towards more content and intellectual property. It is also a continuation of Sony’s dramatic turnaround, which has seen the company recover after years of disappointing performance.
As part of the deal, Sony will take on EMI’s existing debt, which amounts to approximately $1.36bn. The acquisition is still subject to regulatory approval but, should it be given the green light, would prove lucrative for Sony, as EMI generated $663m in revenue last year.