Universal Music Group is the winning bidder to acquire Univision Music Group, which has been for sale since Univision Communications was taken private. The price was not disclosed, but the Hispanic record label group was expected to account for most of the planned divestitures of about a half billion in non-core assets, with the rest from radio station sales.
Univision Music Group, the largest Latin music company in the US, includes Univision Records, Fonovisa Records, Disa Records, Univision Music Mexico and Univision Music Publishing. Since the inception of Univision Music Group in 2001, Universal Music Group has been its distributor in the US, Puerto Rico and Mexico, so it is not surprising that Universal won the bidding to acquire the company.
As part of the transaction, Universal Music Group will continue Univision Music Group’s established relationship with the Univision television networks, Univision and TeleFutura, under a long-term agreement.
“Univision Music Group’s artists, labels and catalog are among the finest in Latin music. This acquisition expands UMG’s presence in one of the most dynamic and vital genres of music today,” said Universal Music Group President and COO Zach Horowitz.
“The sale of Univision Music Group is an important step in the execution of our strategic plan to divest certain non-core assets in order to focus exclusively on our television, radio and online businesses,” said Univision Communications CEO Joe Uva.
RBR/TVBR observation: By coincidence, Univision also announced its first radio divestiture, with four stations in Albuquerque going to Centennial Broadcasting. Univision has indicated that the stations it is most likely to sell are those in markets where it does not own local television stations – and Albuquerque fits the bill. In most of those markets, the logical buyer is Entravision, which generally owns the Univision and TeleFutura stations in the largest markets where Univision does not have O&Os. But it is not the only potential buyer, as demonstrated by the Albuquerque deal, and Entravision might be more interested in swaps than having to take on more debt in the current marketplace. We suspect that the radio divestitures have been put on the back burner to some extent while Univision’s top honchos focused on the bigger deal of getting the troublesome music division sold.