Bertelsmann and Concord Merge to Create Fourth-Largest Music Company
Major Merger Reshapes Global Music Industry
By Klaus Lauer and Cian Muenster
April 28 (Reuters) - Bertelsmann will combine its music division BMG with rival Concord in a deal that would create the world's fourth‑largest music company behind industry leaders Universal, Sony and Warner, the German media group said on Tuesday.
The cash-and-stock transaction will give Bertelsmann a 67% stake in the enlarged company, while Concord's shareholders will get a 33% stake and a one-time cash payment of $1.16 billion.
The combined company is expected to generate pro forma revenue of $2.2 billion and core profit of $730 million in 2026, making the deal among the biggest in the music industry's history.
Profiles of the Merging Companies
BMG and Concord are among the largest independent music companies. BMG works with artists including Bruno Mars and Kylie Minogue, while Concord is home to recordings by Creedence Clearwater Revival, Miles Davis and R.E.M., among others.
Synergies and Financial Impact
Deal Value and Enterprise Valuation
"In terms of overall value, this is one of the biggest deals in our more than 190‑year history," Bertelsmann Chief Executive Thomas Rabe told Reuters. "We do not disclose a company valuation, but you can assume the enterprise value is in the double-digit billions," he added.
Music deals are currently done at earnings multiples of around 15 to 20 times, Rabe said, which would imply an enterprise value of roughly $13 billion using the midpoint of that range, a Reuters calculation showed.
Profitability and Synergy Opportunities
Rabe added that the music business has an above-average core profit margin of 33%, and that synergies from combining the businesses, IT and artificial intelligence would lift profitability further.
Job Cuts and Leadership Changes
He said job cuts were unavoidable but gave no figures.
BMG CEO Thomas Coesfeld, who will take over as Bertelsmann CEO in 2027, will serve as chairman of the combined group, while Concord CEO Bob Valentine will become CEO.
Regulatory Outlook and Ownership Structure
Closing Timeline and Regulatory Expectations
Bertelsmann said it expects no major regulatory hurdles and aims to close the transaction in September or October 2026.
Concord's Ownership
Concord is owned by the Michigan Pension Fund, an investment managed by U.S.-based asset manager Great Mountain Partners.
Reporting Credits
(Reporting by Klaus Lauer and Cian Muenster. Editing by Mark Potter)
