Reuters: Mergers News: U.S. Senate to hold hearing on Universal-EMI deal

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U.S. Senate to hold hearing on Universal-EMI deal May 11th 2012, 21:32 Fri May 11, 2012 5:32pm EDT * Hearing likely to be held in the summer * Universal says "confident of regulatory approval" * Critics say deal would make Universal too powerful WASHINGTON, May 11 (Reuters) - A U.S. Senate antitrust subcommittee is planning a hearing to discuss Universal Music Group's plan to buy EMI's recorded music unit, a deal that would bring the market share of the No. 1 music giant to 40 percent. The Senate Judiciary Committee's antitrust panel, chaired by retiring Senator Herb Kohl, will likely hold the hearing this summer, a Senate staffer said on Friday. Consumer advocates and industry rivals fear that combining Vivendi S.A.-owned Universal and the EMI unit would give the new entity too much power to raise prices. Universal's stars include Lady Gaga and Rihanna while the British label's library ranges from the Beatles and Pink Floyd to Katy Perry and the British singer Conor Maynard. The Federal Trade Commission and European regulators are conducting antitrust reviews of the deal. Congressional hearings have no formal power to affect regulators' decisions. The committee did not put out a witness list in announcing the hearing, but chief executives from the merging parties typically appear, along with supporters and critics of the deal. Universal said in November that it would buy EMI's recorded music unit from Citigroup for $1.9 billion. Since the other portion of EMI, its licensing unit, is being sold to Sony, the number of major record companies will be brought down from four to three. European regulators approved the Sony deal in April; the FTC has yet to weigh in. Critics of the Universal deal say that the proposed transaction would give the company too much pricing power and could determine the fate of new digital outlets. These outlets depend on Universal's willingness to license its catalog. Supporters say that Universal has lost pricing power to illegal music downloads and to major retailers like Amazon , Wal-Mart and Apple. Universal said in a statement that it welcomed the hearing as a way to "answer any questions that the subcommittee may have, address the facts and debunk myths." "We remain confident of regulatory approval," a company spokesman said in an emailed statement. Link this Share this Digg this Email Reprints

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