Warner Music renews offer to buy EMI

1
Warner Music renews offer to buy EMI

• Big Time US Music Label offers to buy London
  Music Group

2
Global Implications

• Segmenting the Market

3
Summary

• EMI Group PLC- London based music group
• Such artists as
• Robbie Williams
• Norah Jones
• Coldplay

4
Summary

• Warner Music Group- US based music company
• Such artists as
• Red Hot Chili Peppers
• Madonna

5
Summary

• Basically
• EMI Group was receiving a lot of flack because of
  bad publicity from various artists under the
  label (Robbie Williams- rehab)
• Having serious financial problems
• Warner Music Group gave EMI an offer to buyout
  the company- Potential Lifeline to EMI

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Summary

• The Deal
• Last year- Warner offered to buyout EMI for 4.6
  Billion.
• This year- Money still in negotiation.
• Estimated that there would be about 680 Million
  in initial savings and gain from the synergy of
  the two companies.
• When the two companies merge- they will control
  about 25 of the global recorded-music market.

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Background

• Music industry has been hurt significantly by
  on-line downloading.
• United States is the largest market for the music
  industry.
• European Commission is examining a Sony-BMG bid
  which would make it the second largest music
  company in the world.

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History between companies

• EMI and Warner have been trying to buy each other
  out for the last 7 years
• Warner has proposed to take over EMI 3 previous
  times
• Deals have been shelved for fear of being blocked
  by European Union

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Benefits of the deal

• If the deal works out it would give both sides
  the ability to cut costs
• EMI would no longer have the smallest market
  share in the US

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Global Implications

• Monopoly
• Loss of jobs
• Poor Financial Condition of EMI

11
Global Implications

• Segmenting the Marketplace
• America is on the prowl

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Conclusion

• EMI is a risk
• Management should be in control
• Risks can be rewarding

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Questions

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