German media giant Bertelsmann is flush with cash and ready to go shopping – and has put EMI on top of its list.
Michael Dornemann, chairman of Bertelsmann’s music group, BMG Entertainment, said yesterday that if the British music label’s planned merger with Time Warner’s Warner Music Group is halted by the regulators, BMG may jump in and scoop it up.
And his odds seem to get better each day. The European Commission is expected to block the Warner Bros.-EMI deal unless the companies agree to big concessions in the next few days, The Financial Times reported last night.
“If the opportunity presents itself, if the return is right, then we’re ready to talk,” Dornemann said at a press conference in Germany.
If EMI’s stock, which hit a nine-month low yesterday on concerns that the merger is in trouble, stays where it is – BMG may have itself a winning deal.
Bertelsmann Chief Executive Thomas Middelhoff said yesterday that the company has about $13.3 billion available to spend on buying more media companies.
He said the company will also commit more than $1 billion to a new venture capital group, eBertelsmann. The company will hold another press conference today in New York to report on the media group’s state of affairs – the company’s net income in the year to June 30 rose 45 percent to 1.3 billion marks ($571.4 million) – and plans for the upcoming year.
Yesterday’s comments were not the first time Bertelsmann has stated its plans to expand its music business. In January, Middelhoff expressed his desire “to become No. 1 in the music business this year,” but did not elaborate on the road he planned to take to accomplish that goal.
Weeks later, word got out that the German media tycoon was in talks with Sony to create the biggest music company on the planet – a deal that never made it past preliminary discussions.