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UPDATE: EMI sells music business to Universal and Sony for £2.5bn

EMI Records

EMI, the legendary UK music firm, has announced it's selling its music business to Universal Music and Sony for £2.5bn.

The deal involves splitting the business in two, with the recorded music division going to Universal for £1.2bn, and the lucrative music publishing unit – home of the Motown catalogue – going to a Sony-led consortium for £1.3bn.

Universal beat arch-rival Warner Music by bdding around £250m more for the recorded music business, founded in 1897, which is home to artists such as the Beatles, Pink Floyd and Coldplay.

A Sony-led consortium saw off a rival bid from BMG Rights Management, a joint venture by Germany's Bertelsmann and the private equity group KKR, for the publishing arm.

EMI has had a troubled history in recent years, with Citigroup seizing ownership of the firm in February after previous owner Terra Firma, a private equity investment company led by Guy Hands, failed a solvency test.

Terra Firma bought EMI for £4.2bn in 2007 just before the global economy collapsed. It struggled to meet payments on the £2.6bn it borrowed from Citigroup to fund the deal.

In June, EMI said it would launch a strategic review into the future of the business, which it said could result in a sale, share flotation, or a restructuring of its finances.

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Andy is Global Brand Director of What Hi-Fi? and has been a technology journalist for 30 years. During that time he has covered everything from VHS and Betamax, MiniDisc and DCC to CDi, Laserdisc and 3D TV, and any number of other formats that have come and gone. He loves nothing better than a good old format war. Andy edited several hi-fi and home cinema magazines before relaunching whathifi.com in 2008 and helping turn it into the global success it is today. When not listening to music or watching TV, he spends far too much of his time reading about cars he can't afford to buy.