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Image header Agence Europe
Europe Daily Bulletin No. 8289
Contents Publication in full By article 18 / 34
GENERAL NEWS / (eu) eu/competition

German Bertelsmann may acquire Zomba (music)

Brussels, 03/09/2002 (Agence Europe) - The European Commission has cleared the proposed acquisition of Dutch companies Zomba Record and Zomba Music by Germany's Bertelsmann Music Group from the Dutch group, Summer Shore. It considers the operation would not be of a kind that would change the competitive situation on the European music market. The move will be carried out by Bertelsmann Music Group (BMG), a subsidiary of Bertelsmann, mainly operating in the fields of TV and sound broadcasting, music publishing, recording and distribution. Present in 41 countries, BMG had 9507 employees on 30 June 2001, with a turnover of EUR 3,664 billion (financial year 2000/01). Zomba Records and Zomba Music operate, respectively, in the music recording and publishing business of Zomba, established in ten Member States with several distribution companies in the United Kingdom and Germany. The Commission has examined the impact that the operation would have on the music recording, distribution and publishing market. Currently, five major global players are rivalling each other for the music recording and distribution market (Universal, Warner, Sony, EMI and BMG). Alongside there are many independent labels, with Zomba and Edel being the two largest "independent" music companies in the EU, which give greater importance to artists, to their repertoire and to recording rather than to distribution activities that they sub-contract to the "majors" and to other third parties. The Commission points out that the operation will entail Zomba Record's disappearance as a rival on the pop music recording and distribution market, but the growth in the existing BMG share on this segment will be limited. Furthermore, Universal will remain the leader in the sector in the UK and in Germany, Member States where the operation will have greater impact as BMG/Zomba will be of a similar size to EMI. The Commission also reached the conclusion that there was no risk that a collective dominant position would be created or strengthened given the relatively small size of Zomba and its independence from the five main groups. Finally, concerning musical publishing, the acquisition will entail little growth in BMG market shares.

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