Common Music Group‘s deliberate $775 million acquisition of Downtown Music Holdings, the mum or dad firm of impartial distributors Fuga and CD Child, might face European Union (EU) scrutiny after the Dutch regulator made a referral request for a contest inquiry. The European Fee, the principle government physique of the EU, has not introduced any official choice on the subject although.
Common (UMG)’s proposed takeover of Downtown by way of the music main’s Virgin Music unit is a part of the corporate’s consolidation technique. When the transaction was unveiled in December, UMG mentioned it was anticipated to shut within the second half of 2025, pending regulatory approvals.
IMPALA, the commerce physique of European impartial labels, and Britain’s Affiliation of Unbiased Music (AIM), representing indie report labels within the U.Ok., have expressed their help for an inquiry.
“IMPALA has constantly known as on regulators to take motion towards UMG’s ‘juggernaut’ technique of serial acquisitions to gatekeep market entry and exert energy over digital providers, in addition to management an entire host of important providers throughout the music market, from publishing to recording, distribution and royalty accounting,” IMPALA mentioned in a press release. “This threatens music followers, in addition to impartial artists and labels.”
It added: “UMG has already purchased PIAS, one of many largest impartial labels and distributors. Downtown is house to two of the world’s largest distributors Fuga and CD Child, utilized by many impartial labels and artists, and a number of different companies offering key providers within the music sector.”
Helen Smith, government chair of IMPALA, mentioned: “This referral is a vital step in the direction of placing a cease to UMG’s juggernaut technique. It exhibits two issues: that regulators see the menace that this technique poses to the market, and that the results transcend nationwide borders. It’s Europe’s competitors, Europe’s variety as an entire that’s at stake.”
AIM CEO Gee Davey known as the Dutch referral “solely proper,” including: “We now look to authorities in different international locations which might be affected by UMG’s aggressive technique to take observe.” And she or he known as on the British regulator, the Competitors and Markets Authority (CMA), to observe go well with. “We’re encouraging the CMA to evaluate the impression within the U.Ok. and equally take a troublesome stance.”
UMG has emphasised the advantages it sees in boosting its attain and scale. The Downtown deal “will improve our capabilities in serving the impartial music group,” UMG CEO Lucian Grainge mentioned in a current earnings convention name. “By investing in companies like Downtown that may and do help at the moment’s main music entrepreneurs, we will additionally assist to advocate for superior insurance policies and observe that may additional shield and develop the whole music system.”
UMG CFO Boyd Muir argued on the identical name: “The rationale so many impartial music entrepreneurs actively search to companion with UMG, once they have extra options than ever earlier than, is that we offer what they’re looking for – essentially the most modern creatives and the best sources to advance their artists’ careers.”
Initially established as a music publishing firm in 2007, Downtown now has greater than 20 places of work the world over with divisions in artist and label providers, distribution, royalty and monetary providers and music publishing. Its enterprise additionally contains Downtown Artist & Label Companies, Curve Royalties, and Songtrust.