Date
21 October 2018
Sony Corp's President and CEO Kenichiro Yoshida address a news conference at the company's headquarters in Tokyo on Tuesday. Photo: Reuters
Sony Corp's President and CEO Kenichiro Yoshida address a news conference at the company's headquarters in Tokyo on Tuesday. Photo: Reuters

Sony buys additional 60% stake in EMI Music for US$2.3 bln

Sony Corp said on Tuesday that is acquiring an additional 60 percent stake in EMI Music Publishing in a US$2.3 billion deal that will help the Japanese firm become the world’s largest music publisher.

The acquisition, the biggest strategic move yet by new CEO Kenichiro Yoshida, will give Sony a catalogue of more than 2 million songs from artists such as Kanye West and Sam Smith, Reuters noted.

“This investment in content intellectual property is a key stepping stone for our long-term growth,” Yoshida was quoted as saying at a news conference in Tokyo.

The spread of the internet led to a shrinking of the music market from around 1999 to 2014, but the situation has turned around due to growth of fixed-price music streaming services, the CEO said.

The deal values EMI Music at US$4.75 billion including debt, more than double the US$2.2 billion value given in 2011 when a consortium led by Sony won bidding rights for the company.

Sony is buying the additional 60 percent stake from Mubadala Investment Company, lifting its ownership to around 90 percent.

EMI currently commands 15 percent of the music publishing industry which combined with its Sony ATV business would make the Japanese giant the industry leader with market share of 26 percent, a company spokesman said.

The deal is part of Yoshida’s mission to make revenue streams more stable with rights to entertainment content – a strategy that follows a major revamp by his predecessor which shifted Sony’s focus away from low-margin consumer electronics, Reuters noted.

Unveiling a new three-year business plan on Tuesday, Yoshida said on Tuesday that his strategy is to prioritize stable cash flow while minimizing the impact of volatile sales cycles of game consoles and other electronic gadgets.

Sony said it aims to generate a total of 2 trillion yen (US$18 billion) or more in cash flow over the next three years, up by at least a third from the previous three years.

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RC

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