LA Times: Apple In Talks To Buy Universal Music For Up To US$6 Billion

| News

In a fascinating development, the LA Times is reporting that Apple is in talks to buy Universal Music from floundering French giant Vivendi International for between US$5 billion and US$6 billion. The LA Times is the same publication that broke the story that Apple was working on a music sharing network for Mac users that had already been signed off on by 4 of the Big 5 music labels, including Universal Music. Now the Times is reporting that Vivendi execs were so enchanted by Apple CEO Steve Jobsi vision for the future, that they asked him to buy a minority stake in Universal. That, in turn, has led to talks of Apple buying the division outright. From the LA Times:

The discussions, a closely held secret for several months, could founder over unresolved issues. Apple hasnit made a formal bid but may offer $5 billion to $6 billion for the music company before Vivendiis April 29 board meeting, according to the sources.

[...]

The Cupertino, Calif.-based computer makeris surprise play for Universal Music could alter the dynamics of the bidding for Vivendiis entertainment assets. The French giant, in a move to reduce debt, seeks to raise $7 billion this year by selling assets that probably would include some or all of its Universal film, television, theme park and music units.

Investor Marvin Davis has offered about $13 billion for 65% of the entertainment assets and has been the only known bidder to express serious interest in the music company. A separate sale of the music operation would appear to work in favor of Liberty Media Corp. and others that are focused on the companyis other entertainment properties.

Jobsi pursuit of Universal comes at a time when Apple, with less than 3% of the desktop computing market, has been struggling to find its next wave of growth and the music industry has been buckling beneath the pressure of online piracy and falling sales.

Defying conventional wisdom, Jobs apparently is betting that music is finally on the verge of becoming a profitable presence on the Internet. Apple has been quietly testing a service that some music business insiders believe could pave the way for widespread online distribution of songs.

There is a lot more information in the full article at the LA Times, which we recommend as a very good read. Note that the LA Times requires a free registration.

Sign Up for the Newsletter

Join the TMO Express Daily Newsletter to get the latest Mac headlines in your e-mail every weekday.

No Comments

Log-in to comment