May 11, 2007

Vivendi's Universal Music will receive approval from the European Commission to buy Bertelsmann's BMG Music Publishing, a source familiar with the matter said on Thursday.

The approval will come this month after Vivendi offered to sell some of its business to assuage the Commission's fears that competition in the sector may be hampered by the tie-up.

Impala, a group of independent record producers and publishers, had wanted but will not get the companies to offer "behavioural remedies" -- promises to change some business practices, the source said.

Impala succeeded last year in overturning approval by the Commission of another music deal -- the Sony BMG joint venture of Sony Corp. and Bertelsmann, which is being reviewed again by the European Union's top competition authority.

Universal's ?1.63 billion ($2.05 billion) bid for BMG would create the world's largest music publisher, a prospect that has prompted unease among some in the music industry.

To complete the deal, Universal proposed to sell its Rondor catalogue of artists, signed up through its British division, for licensing in the 30-nation European Economic Area, sources told Reuters in late March.

That came on top of Universal's offer to sell British portions of the Zomba, 19 and BBC catalogs, including hits by Britney Spears, 'N Sync and the Backstreet Boys, for licensing in the EEA.

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