Nov. 07, 2003
Sony Music, BMG to merge, become 2nd biggest music
label
By Scott Roxborough
BERLIN, Germany -- Sony Corp. and Bertelsmann AG have
signed a non-binding letter of intent to merge their
recorded music operations, Sony Music Entertainment
and BMG, to form the world's second largest music
label, Sony BMG, the companies announced Thursday. The
proposed deal would not include the two companies'
music publishing, physical distribution and
manufacturing businesses. In a joint statement, BMG
and Sony Music Entertainment said the deal would be a
50-50 merger of equals. Sony Music Entertainment
chairman Andrew Lack would be CEO of the new venture
while BMG chief executive Rolf Schmidt-Holtz would
serve as chairman of the board. Bertelsmann and Sony
would have equal representation on the new board of
directors. The deal is conditional on approval from
regulatory authorities in the United States and
Europe. The deal would 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. Among the stars on BMG's various labels
are the Dave Matthews Band, Christina Aguilera, Alicia
Keys, Avril Lavigne and the late Elvis Presley. Sony
shares fell 80 cents to $35.97 in late morning trading
on the New York Stock Exchange. (Associated Press
contributed to this report.)
