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May 22, 2018

Mubadala-led Investor Group and Sony Reach Agreement for Sony to Acquire All of Mubadala's Interest in EMI Music Publishing

    Abu Dhabi, UAE; Tokyo, Japan; and New York, USA; -- May 22, 2018 –Mubadala Investment Company ("Mubadala") and Sony Corporation ("Sony") today announced that they have signed a legally binding memorandum of understanding ("MOU") for the sale of the Mubadala consortium's approximately 60% equity interest in EMI Music Publishing to Sony Corporation of America, a wholly owned subsidiary of Sony, based on an enterprise value of $4.75 billion. As a result of the transaction, Sony will indirectly own approximately 90% of the equity interest in EMI Music Publishing and it will become a consolidated subsidiary of Sony. The closing of the transaction is subject to certain closing conditions, including regulatory approvals.

    Kenichiro Yoshida, President and CEO, Sony Corporation said: "We are thrilled to bring EMI Music Publishing into the Sony family and maintain our number one position in the music publishing industry. I would also like to convey my gratitude to Mubadala, our equity partner in EMI Music Publishing, for sharing our long-term perspective on the potential success of music publishing and their support as we grew the business. The music business has enjoyed a resurgence over the past couple of years, driven largely by the rise of paid subscription-based streaming services. In the entertainment space, we are focusing on building a strong IP portfolio, and I believe this acquisition will be a particularly significant milestone for our long-term growth."

    The original transaction and the investor consortium that partnered with Sony and the Michael Jackson Estate to acquire EMI Music Publishing from a wholly-owned subsidiary of Citigroup Inc. were sourced and assembled by Mubadala Capital's private equity business, which has controlled and managed EMI Music Publishing on behalf of Mubadala and other third-party investors since 2012.

    Hani Barhoush, Head of Mubadala Capital, said: "EMI has been a successful investment for Mubadala and I would like to personally extend my appreciation to the leadership at Sony and Sony/ATV, who have been instrumental in administering the EMI catalog as well as shaping the music landscape on a global basis. They have been tremendous partners to us."

    Adib Mattar, Head of Private Equity for Mubadala Capital and Chairman of EMI Music Publishing, said: "EMI Music Publishing represents one of the world's largest and most diverse catalog of copyrights with iconic songs that span every decade over the last one hundred years. Writers and artists only stand to benefit under consolidated ownership and should feel proud to be part of the Sony family. The sale of our consortium's interest in EMI Music Publishing represents a milestone for Mubadala and our private equity business."

    While the final purchase price to be paid by Sony for all of Mubadala's equity interest in EMI Music Publishing is subject to customary closing adjustments, the total cash consideration Sony expects to pay to consolidate EMI Music Publishing is approximately $2.3 billion. Sony will assume EMI Music Publishing's existing gross indebtedness, which was approximately $1.359 billion as of March 31, 2018. Upon closing of the transaction, Sony expects to record in operating income a non-cash step-up gain of approximately 100 billion yen for the equity interest in EMI Music Publishing it currently owns. The step-up gain and the consolidation of EMI Music Publishing has not been included in Sony's forecast of consolidated financial results for the fiscal year ending March 31, 2019, and Sony is currently assessing the impact of this step-up gain and the consolidation of EMI Music Publishing on its consolidated financial results for the fiscal year ending March 31, 2019.

    Over the past six years, Mubadala and Sony have worked together as partners to create value alongside Sony/ATV Music Publishing ("Sony/ATV"), Sony's music publishing arm, which has been administering the EMI Music Publishing catalog's legacy of iconic writers and artists, reinvesting in existing writer relationships and growing the catalog by signing new writers on a 50/50 basis with Sony/ATV. These actions, coupled with the global rise of streaming and paid streaming services, have led to an appreciation in value of the EMI Music Publishing catalog as millions of consumers have been provided access to innovative distribution channels to enjoy music like never before.

    EMI Music Publishing owns or administers over two million songs that include classics by Queen, Carole King and the Motown catalog along with contemporary songs from Kanye West, Alicia Keys, Drake, Sam Smith, Pink, Pharrell Williams, Calvin Harris, Fetty Wap, Hozier and Sia.

    Together with Sony's 100%-owned music publishing company, Sony/ATV, and Sony's 100%-owned music company, and Sony Music Entertainment (Japan) Inc., the Sony Group collectively owns more than 2.3 million copyrights, featuring the Beatles, contemporary superstars and the Leiber Stoller catalog.

    EMI Music Publishing generated revenue of $663 million, adjusted operating income of $181 million*, and adjusted EBITDA of $249 million* for the fiscal year ended March 31, 2018.

    • *Adjusted to exclude certain non-recurring warrant expense and management incentive plan accruals.
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