Dutch Company to Buy A&M; Records

The PolyGram BV unit of Dutch-based NV Philips has agreed to acquire A&M; Records, owned by trumpet player Herb Alpert and Jerry Moss, for about $500 million, PolyGram officials said today.

The acquisition of A&M;, founded 27 years ago by Alpert and Moss, is the latest in a long-running series of foreign buyouts of U.S. record companies.

PolyGram, which says it is the world’s third largest music group, said it will acquire all of A&M;’s record operations plus its music video interests, its Los Angeles offices, including the former Charlie Chaplin film studios, and the A&M; recording studio.

Music Publishing Excluded

The acquisition does not include A&M;’s music publishing interests.

PolyGram said the two founders of A&M; and its president, Gil Friesen, will continue their day-to-day roles at the company after the buyout.

“We are not seeing the demise of the independent record company, rather the emergence of a new brand of independent,” said David Fine, PolyGram’s president. He said the deal will give A&M; “the resources and marketing infrastructure of a major worldwide group.”

At a news conference, Fine declined to state a precise price for the buyout but said speculation that it was about $500 million “is in the ballpark.” A&M; had sales of about $300 million last year.

A&M;, one of the last privately held major labels, has a talent roster that includes Janet Jackson, Sting, Toni Childs, Joe Jackson, Al Green and Brenda Russell.

Alpert and Moss, who used their initials to name the company, founded it in 1962 in the garage of Alpert’s home in a Los Angeles suburb.

Alpert told reporters that he was “excited about this situation” and that it would give A&M; “more visibility and more muscle” competing for new talent.

“I think it’s the right move at the right time,” he said.

PolyGram has been interested in expanding in the United States, Fine said. Earlier this year it acquired Island Records Ltd., which specializes in rap and reggae music, for an estimated $300 million.

PolyGram already distributes A&M; records in Europe; RCA records is the label’s American distributor.

PolyGram, 90% owned by Dutch electronics giant NV Philips, bought Island Records in August for around $300 million. PolyGram’s artists include Bon Jovi, Fine Young Cannibals, U2, Andrew Lloyd Webber and Luciano Pavarotti.

Music: PolyGram offers about $500 million for company co-founded by trumpeter Herb Alpert.