Warner Music teams up with KKR to re-bid for EMI
15 Mar 2010
After its 2007 failed acquisition of British music company EMI, music industry giant, Warner Music, is once again making a bid for EMI, this time along with private equity firm Kohlberg Kravis Roberts (KKR) to launch a break-up bid in order to get past regulatory hurdles.
New York-based Warner Music, the world's third-largest music company behind Universal Music Group and Sony Music Entertainment is in talks with KKR to discuss how they could structure a deal for EMI, which is expected to be put up for sale this summer, according to a Sunday Times report yesterday.
In order to avoid regulatory hurdles, Warner Music will take EMI's recorded music division, while the New York City-based KKR, which has approximately $50 billion assets under management, will acquire EMI's music publishing arm.
In 2007, Warner Music had said that it would not rule out making another bid for the music business of the London-based EMI Group, after it backed out due to monopoly issues that could have been raised by the competition authorities (See: Warner may re bid for EMI)
EMI bid for Warner Music in 2006 and the US music company retaliated by counter bidding for its UK rival. In 2000, the two companies had first attempted to merge, but the talks had fallen through.
Private equity group Terra Firma went on to acquire EMI in May 2007 for $4.7 billion, (See: EMI agrees $4.7 billion offer from Terra Firma) but filed a case in 2009 against Citigroup on the grounds that the New York-based investment bank "misrepresented fundamental facts" when it acquired EMI. (See: Terra Firma sues Citigroup on EMI acquisition)
