BRUSSELS: They have shaken hands, but German media giant Bertelsmann and French conglomerate Vivendi may have to run the gauntlet of competitors and regulators before they can ink their €1.63 billion ($2.09bn; £1.1bn) deal over BMG Music Publishing [WAMN: 06-Sept-06].
The acquisition of BMG by Vivendi's Universal Music Group would create the world leader in music publishing, a state of affairs that alarms smaller rivals.
Threatens Patrick Zelnick, president of Impala, a Brussels umbrella organization of music companies representing 2,500 independent labels: "I think it's very risky that the economic press is announcing that Vivendi is buying BMG Publishing."
He adds: "This merger would have serious repercussions for competition. We have a strong case to oppose this merger."
Impala has successfully persuaded a European Union appeals court to look again at approval for the deal that created Sony BMG two years ago.
Bertelsmann's cfo Thomas Rabe is confident, nevertheless, that the sale of BMG Music Publishing will ultimately be approved by government regulators. He also said that Bertelsmann expected to pocket the proceeds of the deal before the end of the year.
Data sourced from International Herald Tribune; additional content by WARC staff