Sony BMG Joint Venture Divide On The Cards July 11, 2008
| Global
By Lars Brandle, London
The split of the Sony BMG merger is virtually a done deal, Billboard.biz has learned.
Well-placed sources say a Bertelsmann supervisory board meeting has been convened today to examine the sale of the German media giant's 50% stake, with a final decision on a deal expected to be revealed by the end of the month, following a meeting of the Sony Corp board.
But Bertelsmann's execs ought to brace themselves for the reality of the credit crunch, insiders claim, as its €1.8 billion ($2.8 billion) target price is seen as nearly unreachable in today's economic climate. Insiders say a €1 billion ($1.5 billion) sale is more realistic.
Speculation that Bertelsmann wanted to walk away from the 50/50 JV has gathered steam in recent months. The joint venture agreement on Sony BMG, struck in 2004, is due to expire in August 2009, and rumblings from within the Guetersloh-based Bertelsmann camp have suggested new CEO Hartmut Ostrowski wants to pull the trigger on a deal as soon as possible.
Ostrowski, who took over as Bertelsmann chief executive in January, did little to douse heated speculation when he told Billboard in March, "We might take over 100%, or sell our 50% to Sony so that they have 100%, or we might continue the joint venture," he said. "All three outcomes are possible."
Any spin-off would also have to be approved by regulators in Europe and the United States, a process which would take roughly three months.
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