Seagram In Deal To Buy Polygram
The music industry's "Big 6" record companies are now down to a "Big 5." Montreal-based entertainment and beverage giant Seagram Co., which already owns the Universal Music Group of labels, has reached an agreement to buy PolyGram Records for $10.6 billion. Seagram will acquire 75% of PolyGram from Netherlands-based
Philips Electronics; the remaining 25% will be acquired from public shareholders for $59 per share in cash and Seagram stock.
The deal will make Universal Studios Inc., Seagram's entertainment subsidiary, into the world's largest music company, surpassing the other four majors: Sony Music Entertainment, Warner Music Group, BMG Entertainment, and EMI Music. Universal labels include Universal Records, MCA, Geffen, GRP, and Interscope. PolyGram imprints include A&M, London, Island, Mercury, Motown, Polydor, Verve, and several prestigious classical labels.
The deal is still subject to a vote from PolyGram shareholders and necessary regulatory approvals. The agreement is expected to close within four to six months.
Edgar Bronfman, Jr., president/CEO of Seagram, estimates that the combined companies will be able to save $275 million - $300 million annually, apparently indicating that significant consolidation would follow completion of the deal.
The deal will make Universal Studios Inc., Seagram's entertainment subsidiary, into the world's largest music company, surpassing the other four majors: Sony Music Entertainment, Warner Music Group, BMG Entertainment, and EMI Music. Universal labels include Universal Records, MCA, Geffen, GRP, and Interscope. PolyGram imprints include A&M, London, Island, Mercury, Motown, Polydor, Verve, and several prestigious classical labels.
The deal is still subject to a vote from PolyGram shareholders and necessary regulatory approvals. The agreement is expected to close within four to six months.
Edgar Bronfman, Jr., president/CEO of Seagram, estimates that the combined companies will be able to save $275 million - $300 million annually, apparently indicating that significant consolidation would follow completion of the deal.
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