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UMG may have to divest more than 50% of EMI--report

THE BIG SQUEEZE: In the worst-case scenario, UMG may be forced to divest an additional $370 million in global assets, after Impala and other indie groups interviewed by the EC demanded even more concessions, Bloomberg reported. “If Universal Music has to give up the global rights for everything it would push the deal toward unprofitability,” said Informa Media & Telecoms analyst Simon Dyson. “Universal has invested a lot of money into this deal, and if it doesn’t go through, then they have to sell EMI, and companies won’t offer them anything near what they paid for it.” That could mean that Universal may have to sell more than 50% of EMI's recorded music business, UBS analyst Polo Tang told The Hollywood Reporter this morning. "Vivendi agreed to buy EMI recorded music for 1.2 billion [$1.9 billion] and expected more than 100 million [$156 million] of synergies," Tang said. "Significant asset sales would reduce synergies of Vivendi, but may also put pressure on the balance sheet. Vivendi has limited credit rating headroom, and Vivendi would still have to pay Citigroup 1.2 billion [$1.9 billion] [in September for EMI], while looking for buyers for sale of assets." If there’s an upside to this news, it’s that "global disposals could help Vivendi get approval in the U.S. " (8/10a)

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