Mergers, Acquisitions and Takeovers Case Study

Vivendi’s Acquisition of Bertelsmann’s BMG

OR

Abstract:
On September 7, 2006, Universal Music Group of Vivendi, a French conglomerate, won the deal to acquire German media company Bertelsmann AG’s BMG Music Publishing Group for $2.09 billion, beating the other majors such as Warner Music Group Corporation, Viacom Inc. and EMI Group PLC. Vivendi SA’s Universal Music Group was already the biggest recorded music company and the fourth largest music publishing company in the world. The acquisition is expected to make the Universal Music group the largest music publisher by catalogue size. Analysts have predicted that the share of Universal Music Group in the music publishing market would rise from 12% to 20% with the BMG Publishing purchase. The case, while exploring the operation structure and revenue streams of the music industry, analyses the expected synergy between the two companies and its possible challenges.

Pedagogical Objectives:

• To understand the US music industry
• To understand the business models of BMG Music Publishing Group and Vivendi, the world’s largest music recording company
• To analyse the factors propelling the acquisition of BMG by Vivendi
• To discuss and debate the future prospects and challenges of the deal.

Keywords : Mergers,Acquisitions,Alliances Case Study;Music industry; Big four music companies (Warner Music Group (WMG), EMI, Sony Music, Bertelsmann Music Group (BMG); Warner/Chappel Music; Sony-BMG merger; AOL-Time Warner; Vivendi Universal; Performing right societies; Music publishing; Record companies

Contents : 
Industry Overview
Bertelsmann And Bmg
Vivendi’s Business Divisions
The Acquisition
The Deal At A Glance
Bertelsmann’s Major Products And Services
Vivendi’s Major Products And Services