By Foo Yun Chee BRUSSELS (Reuters) -The two co-chief executives of Universal Music Group's Virgin Music Group on Thursday pushed back against critics of its $775 million acquisition of Downtown Music,
Virgin Music Group's CEOs Defend Downtown Music Acquisition Amid Criticism
By Foo Yun Chee
BRUSSELS (Reuters) -The two co-chief executives of Universal Music Group's Virgin Music Group on Thursday pushed back against critics of its $775 million acquisition of Downtown Music, saying the deal would create a company providing a wide range of services to independent labels.
The European Commission is currently reviewing the deal announced last December and will announce on July 22 whether to clear the deal with or without concessions or open a four-month-long investigation if it has concerns.
Universal is the world's biggest music company and Virgin is its global unit for independent music. Downtown owns a major music publisher and a number of other businesses that help musicians collect royalties.
The acquisition has drawn criticism from European independent music labels group Impala, which said it would further entrench Universal's position across European music markets and strengthen its control over market access for independent labels.
Virgin will boost Downtown Music's businesses FUGA, Curve Royalties, CD Baby, Downtown Music Publishing and Songtrust after the acquisition, the two co-CEOs said, denying that these services would be restricted or shut down.
"We see the extraordinary value of investing in and expanding access to these and other platforms," Virgin Music Group's co-CEOs Nat Pastor and JT Myers said in a note to staff on Thursday and seen by Reuters.
They dismissed what they said were suggestions that Universal's market share had "skyrocketed" since its acquisition of EMI in 2012.
"The reality is that during this period the independent sector's market share has grown materially, while UMG's market share has not," Pastor and Myers said.
They also rejected suggestions that Virgin would exploit Downtown's customer base to gain a competitive edge for Universal.
"We're proud to say that since the day we entered this business, we have never had a single complaint of misuse of client information of any kind," Pastor and Myers wrote.
(Reporting by Foo Yun CheeEditing by Peter Graff)
