Sony Corporation and Bertelsmann AG today announced that
Sony has agreed to acquire Bertelsmann's 50% stake in Sony
The music company, to be called Sony Music Entertainment Inc. (SMEI), will
become a wholly owned subsidiary of Sony Corporation of
Sony and Bertelsmann AG originally created the Sony
joint venture in August 2004.
Once the transaction is completed, SMEI will be comprised of premier music
labels such as
Records, Epic Records, J Records, Jive Records, RCA Records, and Zomba. Key
recording artists will include Celine Dion, Alicia Keys, Yo-Yo Ma, Bruce
Springsteen, Justin Timberlake, Usher and Jay Chou.
As part of the transaction, the parties have also agreed to continue to share
the company's manufacturing and distribution requirements between Sony's
manufacturing subsidiary, Sony DADC, and Bertelsmann's services company, Arvato
Digital Services GmbH ("Arvato"), by extending the agreements with
Arvato for additional terms of up to six years. In addition, Bertelsmann will
be taking over selected European music catalog assets from Sony
"After a careful and thorough review, we made the strategic decision to
sell our investment in this joint venture to Sony, a step that we believe will
benefit the stakeholders of both our companies," stated Hartmut Ostrowski,
Chairman and CEO of Bertelsmann AG. "This move is consistent with our new
growth strategy and will enable us to focus on our defined growth areas. Sony
has been an excellent partner, and they are the right company to take this
business to the next step and ensure that it realizes its full value and
potential. We look forward to witnessing Sony Music Entertainment's exciting
future under Sony's ownership."
Consummation of the transaction remains subject to a number of conditions,
including approvals of regulatory authorities in certain jurisdictions.