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November 6, 2003
BERTELSMANN AG AND SONY CORPORATION AGREE TO FORM JOINT MUSIC GROUP
The international media and entertainment companies Bertelsmann AG and Sony Corporation today announced that they have signed a non-binding letter of intent to form a jointly owned recorded music company to be called Sony BMG. The company will be 50% owned by Bertelsmann and 50% owned by Sony.
The joint venture of BMG and Sony Music Entertainment will combine their recorded music businesses. The new company would not include the companies' music publishing, physical distribution and manufacturing businesses.
Rolf Schmidt-Holtz, currently Chairman and Chief Executive Officer of BMG, would serve as Chairman of the Board of the new joint venture. The Board of Directors of the new company would be made up of an equal number of representatives from Sony and Bertelsmann.
Andrew Lack, Chairman and Chief Executive Officer of Sony Music Entertainment, would be Chief Executive Officer. The newly formed joint venture would include senior executives from both music groups.
Consummation of the transaction remains subject to a number of conditions, including approvals of the regulatory authorities in the US and the European Union.