Sony Music has today (May 19) confirmed that it has completed the acquisition of two companies from Kobalt Music Group: recorded music company AWAL plus Neighbouring Rights (formerly Kobalt Neighbouring Rights).
However, not every hurdle has been cleared: Sony’s announcement comes in the same week that the UK’s Competition and Markets Authority (CMA) confirms it is opening an investigation into the double acquisition, which Sony has previously valued at $430 million. (Kobalt Music Group Ltd is a UK-based company.)
The CMA served an initial enforcement order on Monday (May 17), but is yet to set a date for its Phase One investigation into the deal.
In a statement to media issued earlier today, Sony Music said: “Sony Music Entertainment (SME) today announced that it has completed its acquisition of AWAL, a leading provider of services to independent recording artists, and Neighbouring Rights, one of the top performance rights collection agencies for artists and independent labels worldwide.
“AWAL and Neighbouring Rights will become a new division within SME’s suite of independent artist and label services offerings and will be enhanced by the technology and network of SME’s independent music distribution company, The Orchard. Lonny Olinick will remain AWAL’s CEO.
“Prior to the closing of the acquisition, the UK Competition and Markets Authority (CMA) initiated a review of the transaction. SME continues to work closely with the CMA to secure a positive outcome later this year.”
Could the UK competition watchdog now throw a spanner in the works of Sony’s completed AWAL takeover, and demand retrospective conditions to be met?
It’s certainly possible. However, the last record industry-related buyout that resulted in a similar investigation by the UK CMA – Hasbro’s near-$4 billion acquisition of Entertainment One, including eOne Music – was cleared at the start of 2020.
EOne Music has since been sold again, to financial giant Blackstone, in a $385 million cash deal.
Sony’s acquisition of AWAL and Neighbouring Rights comes in the same year that Sony Music Group – led by Chairman Rob Stringer – has agreed two further nine-figure acquisitions: that of Brazilian label Som Livre, in addition to the song catalog of Paul Simon.
Sony Music last month also confirmed it had acquired the back catalog of Mexican label Remex Music for an undisclosed fee.Music Business Worldwide