Mubadala Investment Company and Sony Corporation have revealed a memorandum of understanding which could see Mubadala's 60% equity interest in EMI Music Publishing sold to Sony Corporation of America for $2.3 billion. That's according to a joint press release published to Sony Global's official site on May 22. The deal is based on an enterprise valuation of Mubadala's interest of around $4.75 billion and would result in Sony owning 90-percent of EMI. The apparently lowered cost of the transaction for Sony would be based on the company taking on Mubadala's related debts – which totaled $1.359 billion at last assessment. If the deal goes through, it effectively means that EMI Music Publishing would become a consolidated subsidiary of Sony. It could also bring significant revenue for the company since EMI generated around $663 million for the fiscal year ending to March. No timeframe has been set for when the deal could be finalized.
In the meantime, it's worth pointing out that there are still several hurdles the companies need to overcome before the deal can be finalized. Fine details of the arrangement must still be considered, including consideration for the purchase price itself. Beyond that and other "customary closing adjustments" Sony points to the possibility of government intervention, as well. Regulatory agencies, wherever applicable, will need to consider the acquisition and its ramifications on the music industry and associated industries before approving the deal. That's particularly pertinent with consideration for recently observed growth in the music industry, fueled by paid streaming media subscriptions. What's more regulatory agencies will need to consider Sony's already massive collection of holdings in the industry.
Collectively, Sony's parent company holds in excess of 2.3 million copyrights in terms of music. That includes the Beatles, dozens of current popular artists, the Leiber Stoller catalog but the company also has close ties to the Michael Jackson Estate – which actually stems from activity leading up to this EMI Music Production purchase. Those are split between Sony/ATV and Sony Music Entertainment Inc. This EMI deal would result in at least two million further songs being added to that. Among those holdings are artists such as Queen, Carole King and the Motown, Kanye West, Alicia Keys, Drake, Sam Smith, Pink, Pharrell Williams, Calvin Harris, Fetty Wap, Hozier, and Sia.