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Access Industries to Acquire Warner Music Group for $3.3B

Len Blavatnik’s Access previously bid unsuccessfully for MGM; Blavatnik already a WMG investor

Len Blavatnik's Access Industries won the auction for Warner Music Group in a $3.3 billion deal that includes WMG's entire music and music publishing business.

Blavatnik, who had bid unsuccessfully for MGM, was already a Warner investor and served on its board. He is also a friend of Warner CEO Edgar Bronfman.

"I am excited to extend my longstanding involvement with Warner Music," said Blavatnik in a statement. "It is a great company with a strong heritage and home to many exceptional artists. I look forward to working closely with the many talented people within the company."

At the closing of the transaction, WMG will become a privately held company and its stock will no longer be traded on the New York Stock Exchange. The company will keep the Warner Music Group name and continue to operate out of its current facilities.

WMG's stockholders will receive $8.25 per share in cash at the closing of the transaction. The purchase price of $8.25 per share represents a 34.4 percent premium over the volume-weighted average share price of $6.14 over the previous six months.

Blavatnik’s $3.3 billion purchase is the likely warm-up act for a far-reaching deal — a combination of Warner and EMI Music — that further consolidates the shrinking music industry.

With EMI on the block by owner Citigroup, a follow-up arrangement starring Blavatnik would leave recorded music in the hands of three giants — SonyBMG, Universal Music Group and Warner-EMI, each in the throes of adapting more than a decade after the digital age exploded. 

A combined Warner-EMI inevitably would purge cost, jettisoning hundreds of staffers and scores of music acts to stay pace with declining music sales. That way, profits still might be squeezed from a business in which songs are dizzyingly popular, but cheaper to buy, than CDs.

"We believe this transaction is an exceptional value-maximizing opportunity that serves the best interests of stockholders as well as the best interests of music fans, our recording artists and songwriters, and the wonderful people of this company," Bronfman said.