UMG submits ‘strong treatment’ to EU regulator to handle ‘solely remaining concern’ about $775m Downtown deal

Common Music Group has submitted what it calls a “strong treatment” to the European Fee, following receipt of a Assertion of Objections final month concerning its proposed $775 million acquisition of Downtown Music Holdings.

A UMG spokesperson instructed MBW on Friday (December 12) that the corporate’s response to the regulator “comprehensively addresses” the Fee’s excellent difficulty with the transaction.

“Following constructive conversations with the European Fee, now we have submitted a strong treatment that comprehensively addresses the Fee’s solely remaining concern,” the spokesperson mentioned.

“We’re assured that the Fee will acknowledge the advantages of the transaction for artists, labels, impartial music, and followers in Europe, and clear the transaction swiftly.”

UMG spokesperson

They added: “This deal is about providing impartial music entrepreneurs entry to world-class instruments and help to assist them succeed.

“We’re assured that the Fee will acknowledge the advantages of the transaction for artists, labels, impartial music, and followers in Europe, and clear the transaction swiftly.”

UMG’s submission to the EC represents a vital juncture within the Fee’s investigation into the proposed deal. The EC opened its in-depth Part II investigation into the proposed acquisition in July, following a 25-day preliminary Part I evaluate.

The Fee mentioned that its goal was to evaluate two particular considerations: “if the transaction could enable UMG to scale back competitors out there for (i) the wholesale distribution of recorded music within the European Financial Space (‘EEA’) by buying commercially delicate information of its rival file labels; and (ii) the provision of A&L companies within the EEA by eradicating an vital aggressive pressure”.

Downtown gives artist and label companies by its FUGA music distribution platform, and gives royalty accounting companies by its Curve platform, which handles processing, accounting, cost and associated companies for royalties in addition to rights administration.

The European Fee issued a Assertion of Objections to UMG in November, formally setting out its preliminary considerations in regards to the proposed acquisition.

In describing the outcomes of its investigation, the press launch issued final month centered solely on UMG’s potential entry to information “saved and processed” by Downtown’s Curve platform.

The Fee mentioned in a press launch in November that “such data benefit for UMG would hamper rival labels’ capacity and incentive to compete with UMG.”

UMG’s Virgin Music Group introduced the Downtown acquisition in December 2024. The proposed transaction would see UMG purchase Downtown and its subsidiaries, together with FUGA (music distribution), Curve (royalty accounting), CD Child, and Songtrust (publishing administration).

The European Fee has till February 6, 2026, to achieve a last resolution on the proposed acquisition.

On the conclusion of its investigation, the Fee can clear the merger with or with out circumstances, or prohibit it fully if competitors considerations can’t be adequately addressed.

As beforehand reported by MBW, the UMG-Downtown deal didn’t meet the EU’s customary turnover thresholds that might usually require notification to Brussels.

The EC determined to look into the deal as a result of the Netherlands triggered a authorized mechanism in EU competitors legislation referred to as Article 22. Austria subsequently joined the referral.

The deal has attracted opposition from impartial music organizations. In July, over 200 folks signed a letter objecting to the acquisition, together with 20 staff from Beggars Group and Secretly Group firms, whereas a “100 Voices” marketing campaign launched in October that includes testimonies from indie reps urged the EC to dam the deal.

Final month, responding to reviews that the EC was anticipated to difficulty an announcement of objections over the deal, IMPALA mentioned in an announcement that it “welcome[s] this information and look[s] ahead to official affirmation and particulars of the objections.”

In October, Music Enterprise Worldwide revealed a assortment of views from leaders within the international impartial music distribution area on the subject of Common‘s proposed $775 million takeover of Downtown.

In September, Downtown Music CEO Pieter van Rijn issued an open letter commenting on UMG’s proposed acquisition of his firm. Van Rijn addressed what he calls “whispering campaigns of misinformation that now we have seen pervade the general public debate” in regards to the deal.

In July, Virgin Music Group’s bosses slammed what they referred to as “juvenile and offensive falsehoods” unfold by opponents of VMG’s deliberate Downtown acquisition.

On July 2, the European Composer & Songwriter Alliance (ECSA) issued an open letter to the European Fee urging it to dam the deliberate acquisition.Music Enterprise Worldwide