Bertelsmann, KKR plan joint venture aimed developing global music rights management business

Bertelsmann, KKR plan JV for music rights mgmt

FRANKFURT — Bertelsmann AG, Europe’s biggest media company, said Wednesday it plans to start a joint venture with KKR & Co., the private equity fund, that will focus on music rights management.

In a statement, the privately held Bertelsmann said it will own 49 percent of the venture and Kohlberg Kravis Roberts & Co. LP will hold 51 percent. Financial terms related to the deal were not disclosed and it is expected to be completed within a few months, pending regulatory approvals.

The joint venture will include Bertelsmann’s BMG Rights Management unit and its chief executive, Hartwig Masuch, will remain CEO of the new company. Currently, BMG Rights Management has some 300 artists in its rights catalog.

The companies said they “envisage building a major music rights management business” through acquisitions and growth. KKR expects to contribute to BMG’s development by providing substantial equity investments through its European private equity funds.

“With access to meaningful investment capital, we expect the partnership with KKR to contribute significantly to accelerating the development of the business,” Bertelsmann CFO Thomas Rabe said in the statement. “We both want to broaden BMG’s global reach faster than originally anticipated. In this way we will be able to actively participate in the expected market consolidation.”