EC OKS UNIVERSAL’S $2.1B BMG BUY

Talk about a day late and a dollar short.

Just one day after Terra Firma trumped Warner Music’s 260 pence per share offer for EMI with its own 265 pence per share bid, the European Commission announced that it approved Universal Music Group’s $2.1 billion purchase of BMG Music Publishing.

The EC’s decision, along with its expected blessing of the SonyBMG merger before the end of the year, removes a key hurdle to a Warner Music-EMI deal and strengthens the Edgar Bronfman-led company’s argument that regulators wouldn’t block a deal given the music industry’s deteriorating fundamentals.

As a condition of the EC’s approval, UMG agreed to sell off the Rondor UK and Zomba UK publishing catalogs acquired in the BMG deal.

Even with those disposals, the combined UMG-BMG tops EMI as the largest music publishing company, controlling the rights to artists like Prince and The Killers.

When Warner Music considered making another run at EMI late last year, the company held extensive meetings with the EC to understand the regulatory challenges a deal would face.

The company went as far as enlisting the support of trade group Impala, which represents independent record labels in Europe and is a vehement opponent to both the UMG-BMG and SonyBMG deals, by agreeing to sell off certain assets to Impala’s members.