Bertelsmann acquires BMG from PE firm KKR

MUMBAI: Bertelsmann, the international media group, said that it is taking full ownership of the innovative music rights management company BMG by acquiring the shares currently held by Kohlberg Kravis Roberts & Co. (KKR), and will continue to develop BMG as a wholly owned subsidiary.

The transaction, which is subject to regulatory approval, is scheduled to close during the first half of this year.

The parties have agreed to keep the financial details of the transaction confidential. BMG administers the rights to more than one million songs,including works by such artists as Bruno Mars, Duran Duran, Gossip, Johnny Cash, and Will.i.am. It also represents the master rights (composition and recording) of artists who include Brian Ferry, Nena and Anastacia.

Bertelsmann Chairman & CEO Thomas Rabe said, "This is a great day for Bertelsmann: We are bringing the music home to our group. A few years after our exit from the traditional music business, in association with KKR, we have succeeded in building the world?s fourth-largest music rights management business." Rabe emphasized that KKR has been a good partner. "Our partnership made it possible for BMG to take advantage of consolidation opportunities and to rapidly advance the organic expansion of the business. I thank them for an excellent collaboration."

Taking full ownership of BMG is an important step in putting Bertelsmann?s growth strategy into practice, Rabe explained. "We are happy to have BMG as our own company again. CEO Hartwig Masuch and his team deserve our thanks for the passion and know how they brought to developing a small creative nucleus into a powerhouse that provides the right answers to the challenges of the music industry in this digital age."

KKR Europe Head Johannes Huth said, "Our innovative partnership with Bertelsmann, which combined the professional expertise of a global media company with the financial strength, network and business-building expertise of KKR, was a complete success. We explored new business approaches with Bertelsmann; BMG did pioneering work in the music rights market with its digital, service-focused business approach. The model of a ?growth and build? partnership between a corporate group and KKR is bound to be seen more often in the future."