EMI Group PLC
1 May 2001
EMI AND BERTELSMANN END MERGER DISCUSSIONS;
EMI TRADING UPDATE
LONDON, 1 MAY 2001 - EMI Group plc ('EMI') today announces
that it has agreed with Bertelsmann AG to end discussions
about a possible merger of its music businesses with
Bertelsmann Music Group ('BMG').
Over the past five months, the two companies have conducted a
rigorous assessment of alternative structures and antitrust
remedies. It has not proved possible, in the present
regulatory environment, to construct a combination which both
creates significant value for shareholders and also has a high
likelihood of approval from antitrust authorities in Europe
and the USA. Both companies feel that it is not in the
interests of shareholders, artists or employees to allow the
uncertainty to continue.
EMI's costs for the work to date are not material and there
will be no further provision for deal costs beyond that made
at the half year.
EMI's trading results for the 12 months ended 31 March 2001
will be presented in detail on 22 May. However, the company is
pleased to provide an early indication of the outcome for the
year. Based on unaudited results, group sales improved by 12%
to almost £2.7 billion and group operating profit (excluding
associates and HMV) increased by 14% to approximately £330
million. Adjusted profit before tax increased by 6% to
approximately 260 million.
EMI Group Chairman, Eric Nicoli, said:
'After exhaustive analysis and discussion, we have been unable
to find a deal with Bertelsmann which works both for
shareholders and for the regulators.
'We are, nevertheless, excited about EMI's future. We are the
world's third largest record company and the largest music
publisher and we will continue to take bold steps to build our
business. EMI has good momentum and the recent signing of
superstar Mariah Carey, the appointment of Andy Slater as CEO
of Capitol Records and the creation of the MusicNet
partnership, will all contribute to the next phase of our
'I am delighted that we have produced very good results and
further strengthened our business despite the inevitable
distractions over the period of merger discussions.
'Finally, I want to say that our dealings with Bertelsmann
have been constructive and friendly throughout. A very
positive relationship has developed between our two companies
and I wish the Bertelsmann team well for the future.'
Contact: Amanda Conroy, EMI Group, London tel: + 44 20 7667 3216
Patrick Handley, Brunswick Group, London tel: + 44 20 7396 5395