Financial details were not disclosed but sources familiar with the matter said that for the German firm the deal was valued at around $1.5 billion (€960 million).
“This move is consistent with our new growth strategy and will enable us to focus on our defined growth areas,” Bertelsmann chairman Hartmut Ostrowski said in a statement.
When Ostrowski took over his post in December of last year, he labelled the company’s music sector as developmentally weak and planned to place it under review. In June, the German daily Frankfurter Allgemeine Zeitung reported that Ostrowski had decided to get out of the music business owing to falling sales caused by internet downloads.
“Sony has been an excellent partner, and they are the right company to take this business to the next step and ensure that it realizes its full value and potential,“ Ostrowski said.
Sony and Bertelsmann had each owned half of the music publishing firm since its creation in 2004, and Sony reportedly had an option to buy Bertelsmann’s stake.
“This acquisition will allow us to achieve a deeper and more robust integration between the wide-ranging global assets of the music company and Sony’s products, operating companies and affiliates. It enables us to offer a total entertainment experience to consumers,” Sony CEO Howard Stringer said Tuesday.
Sony Music Entertainment Incorporated (SMEI), as the new entity will be known, is to encompass a string of music labels that include Arista Records, Columbia Records, Epic Records, J Records, Jive Records, RCA Records and Zomba. Among its best-known artists are Celine Dion, Alicia Keys, Yo-Yo Ma, Bruce Springsteen, Justin Timberlake, Usher and Jay Chou.
Bertelsmann is also active in television with the RTL group, publishing, with Gruner + Jahr and Random House, services, and book and record clubs. Those clubs are currently being restructured however, and their partial sale is also expected to follow.