Business Case Studies, Strategy Case Study, Mergers, Acquisitions, Alliances and Synergies

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Mergers, Acquisitions, Alliances and Synergies Case Study

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Case Title:

Sony-BMG Joint Venture: Lessons from a Dis-jointed Venture

Publication Year : 2005

Authors: Rajendar Singh, Sumit Kumar Chaudhuri

Industry: Musical Entertainment

Region: USA

Case Code: MAA0057

Teaching Note: Not Available

Structured Assignment: Not Available


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Abstract:
Sony and BMG Music Entertainment, the second-largest music record company in the world, was formed as a 50:50 joint venture between Sony Music and Bertelsmann Music Group in August 2004, with both the companies having equal representation in its board. Soon, the company's sales declined and Michael Smellie, Sony and BMG's chief operating officer from Bertelsmann, tendered his resignation. Following this, the Bertelsmann group opposed the renewal of contract for Andrew Lack, who was from Sony and was the CEO of the joint venture, on the grounds that he was responsible for the lackluster performance of the company.

Pedagogical Objectives:

  • To discuss the ongoing consolidation in the global music industry
  • To discuss the reasons that led to the Sony-BMG joint venture
  • To discuss the opposition of the Bertelsmann group to the renewal of the contract for Andrew Lack to remain CEO of the joint venture.

Keywords : Sony BMG;Mergers,Acquisitions,Alliances Case Study; Sony Music; Bertelsmann Music Group; Global music industry; On-line music piracy; Internet and file swapping technology; Joint venture; Synergies of a merger; Pay for play scandal; Andrew Lack; Restructuring strategies; Executive tension; Personality clashes; Sony BMG labels; Costs cutting strategies

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Currency Exchange Rates

Case Study :
   INR 200 = USD ($)

Structured Assignment:
   INR 150 = USD ($)

Teaching Note :
   INR 400 = USD ($)
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