Common Music Group’s $775 million acquisition of Downtown Music Holdings LLC is about to face a proper investigation by the European Fee, which has raised issues over the potential stifling of competitors in providers supplied to artists signed to impartial labels.
The European Union’s competitors watchdog confirmed on Friday that it might open an preliminary assessment into the deal.
The investigation comes amid rising scrutiny of mergers that, regardless of their comparatively small dimension, might have vital implications for the music trade, significantly in how impartial labels work together with main gamers like Common.
On the coronary heart of the Fee’s issues is the impression of the acquisition on competitors within the music licensing market.
The deal, executed by way of Common’s Virgin Music unit, would see the corporate purchase Downtown Music’s catalog and licensing arm, which supplies a spread of providers to impartial artists and labels. This, in response to the Fee, might probably restrict entry to licensing alternatives or give Common Music an unfair aggressive edge within the market.
The EU’s means to scrutinize such offers was bolstered by latest modifications to its regulatory powers, permitting for extra intensive oversight of transactions that may not have beforehand been thought-about vital sufficient to warrant investigation. Whereas the deal’s worth is way decrease than different high-profile transactions within the sector, the European Fee is concentrated on whether or not it might considerably scale back competitors within the music trade.
In February 2024, Nairametrics reported that Common Music Group (UMG) had acquired a majority stake in Mavin International, the famend Nigerian document firm based by Don Jazzy. The label, residence to high African artists like Rema, Ayra Starr, Crayon, and Ladipoe, performs a vital function within the international rise of Afrobeats.
The acquisition was accomplished by the third quarter of 2024, following regulatory approval. Whereas the particular phrases weren’t disclosed, Billboard had beforehand reported that Mavin was valued at over $125 million, with the sale worth probably reaching between $150 million and $200 million. It remained unclear whether or not the deal concerned Mavin’s publishing rights.
Common Music, which controls a dominant share of the worldwide recorded music market, has lengthy been on the forefront of consolidation inside the music trade. The acquisition of Downtown Music would additional cement its place by bringing in a portfolio of music publishing, licensing, and distribution property.
For its half, Common has argued that the deal will improve the corporate’s means to serve artists by increasing its service choices and bettering efficiencies. The European Fee now requires Common to formally notify it with the total particulars of the transaction.
