EU conditionally approves Universal-EMI merger

The European Commission is set to approve Universal's $1.9 billion purchase of EMI, but will require it to sell off many of the target's major record labels, the Wall Street Journal reported Thursday. Citing people familiar with the deal, the Journal said Universal will have to sell record labels and global rights connected to 60 percent of EMI's Europe revenues, potentially undermining the deal's economic rationale. "The die has been cast and the decision has been made, though it has come at a very heavy price for Universal," the Journal quoted an individual involved in the EU approval talks as saying. The merger -- which has already been given the green light in several countries, including Japan and Canada -- still requires US approval. The company will have to let go of EMI assets that generate some 350 million euros ($457 million) in annual revenue, including much of the Parlophone label, which includes Coldplay, Queen and Gorillaz, the Journal reported. The Beatles are excluded from the concessions deal, it added. The terms could see Universal back away from the deal and its rival, Warner Music -- which has opposed the purchase from the beginning -- step in to buy EMI instead, according to the Journal. Brussels could announce the decision as soon as Friday. When announcing the probe in March, the European Commission warned that the deal "could reduce competition in the recorded music market to the detriment of European consumers." The Commission said it worried the merged company would not face sufficient price competition from competitors or even illegal downloading. Universal Music Group -- a unit of the French group Vivendi -- last November announced its purchase of EMI from US bank Citigroup for £1.2 billion (1.5 billion euros, $1.9 billion). EMI -- home to a galaxy of stars including The Beatles, Coldplay and US pop starlet Katy Perry -- was seized by its main creditor Citigroup in February 2011 from private equity owner Terra Firma.