Sony Corporation announced Tuesday that is has signed a deal to acquire Mubadala Investment Company’s 60% equity interest in EMI Music Publishing at the cost of $2.3 billion to become the world’s largest music publisher. The deal will raise Sony’s stake in EMI to around 90%, based on an enterprise value of $4.75 billion.
As a result of the transaction, Sony will indirectly own approximately 90% of the equity interest in EMI and it will become a consolidated subsidiary of Sony. The closing of the transaction is subject to certain closing conditions, including regulatory approvals.
While the final purchase price to be paid by Sony for all of Mubadala’s equity interest in EMI Music Publishing is subject to customary closing adjustments, the total cash consideration Sony expects to pay to consolidate EMI Music Publishing is approximately $2.3 billion.
Kenichiro Yoshida, President and CEO, Sony Corporation said: “We are thrilled to bring EMI Music Publishing into the Sony family and maintain our number one position in the music publishing industry. I would also like to convey my gratitude to Mubadala, our equity partner in EMI Music Publishing, for sharing our long-term perspective on the potential success of music publishing and their support as we grew the business. 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 IP portfolio, and I believe this acquisition will be a particularly significant milestone for our long-term growth.”
The takeover of EMI is part of Yoshida’s move to make revenue streams more stable with rights to entertainment content – a strategy that follows a major revamp by his predecessor which shifted Sony’s focus away from low-margin consumer electronics.
The acquisition is the biggest strategic move yet Yoshida and gives Sony a catalogue of more than 2 million songs from artists such as Kanye West, Sam Smith, Sia among others.
