Sony is acquiring German media companyÂ Bertelsmann’s 50% stake in music label Sony BMG, which will be renamed as Sony Music Entertainment Inc. (SMEI) for $1.2 billion.
Sony CEO Howard Stringer said the acquisition would let Sony achieve deeper integration between the wide-ranging global assets of the music company and Sony’s products, operating companies and affiliates.
Bertelsmann said it’s gearing the business of its Bertelsmann Music Group (BMG) towards music rights management.
As part of the transaction, Bertelsmann is taking over selected European catalogs of music rights comprising the works of more than 200 artists from Sony BMG.Â Sony Music will, however, continue to distribute those catalogs.
SMEIÂ will become a wholly owned subsidiary of Sony Corporation of America.
Sony and Bertelsmann AG of Germany established the Sony BMG joint venture in August 2004, when the traditional music industry was already under ferocious assault from digital forces. That assault has only intensified in the four years since the Sony-BMG venture was set up.
After the transaction is completed, SMEI will be comprised of music labels such as Arista Records, Columbia Records, Epic Records, J Records, Jive Records, RCA Records and Zomba.