In its second major music industry acquisition in recent months, British entertainment conglomerate Thorn-EMI has agreed to purchase 50% of London-based Chrysalis Records for $75 million, according to industry sources.
The deal will be announced in the next few days and will require the approval of the Thorn-EMI board, sources said.
One knowledgeable record industry source said Thorn-EMI was paying “a gigantic price” for its stake in the relatively small company, which records such artists as Billy Idol and Huey Lewis & the News.
Chrysalis became the subject of takeover rumors recently when 10% of its stock was purchased by Geffen Records Chairman David Geffen. Sources say the West German Bertelsmann Music Group, the owner of RCA Records, recently bid $60 million for a 50% stake in the company.
One source close to the deal called it “a very nationalistic move on Thorn-EMI’s part, a way of countering growing German and Japanese influence in the record industry.” Chrysalis recordings are distributed in the United States by CBS Records, a subsidiary of Sony Corp. The distribution agreement with CBS runs for two more years.
In January, Thorn-EMI paid $377 million to acquire SBK Entertainment World, whose principal asset was a 250,000-song music publishing catalogue that once belonged to CBS. It was by far the most expensive music publishing acquisition ever.