MUSIC MEGA-DEAL; SEAGRAM BUYS NO. 1 POLYGRAM.Byline: Dave McNary Daily News Staff Writer Universal Studios owner Seagram Co. announced Thursday it's buying PolyGram NV, the world's biggest music company, for $10.6 billion, the latest in a string of multinational, multibillion-dollar deals. When the deal is completed in six months, Seagram will become the dominant force in the worldwide music business with 23 percent of the market. The buyout, which had been rumored for several weeks, vaults Seagram into the same league as global media conglomerates like Time Warner Inc. and Walt Disney Noun 1. Walt Disney - United States film maker who pioneered animated cartoons and created such characters as Mickey Mouse and Donald Duck; founded Disneyland (1901-1966) Disney, Walter Elias Disney Co., giving it the ability to attract top talent in all entertainment categories. ``This deal shows that we really have entered the age of the entertainment juggernaut,'' said Kevin Skislock, an analyst with L.H. Friend, Weinress, Presson & Frankson. Seagram will now receive close to three-quarters of its cash flow from music, movies, home video, theme parks and television. ``There is a lot of synergy in the entertainment business,'' Skislock said. ``The value of a movie, for example, has become much more influenced by its soundtrack potential.'' Universal's music operations have been the studio's steadiest performer in recent years, under the guidance of veteran executive Doug Morris. Universal's music roster - led by acts with strong domestic appeal such as Reba McEntire Reba Nell McEntire (born March 28, 1955) is a Grammy award winning American singer and country music performer, and actress.[1] Sometimes referred to as "The Queen of Country Music",[2][3] , the Wallflowers and B.B. King - will be joined by a varied lineup including Elton John Sir Elton Hercules[1] John CBE[2] (born Reginald Kenneth Dwight on 25 March, 1947) is a five-time Grammy and one-time Academy Award-winning English pop/rock singer, composer and pianist. , Hanson, Nine Inch Nails, LL Cool J, Luciano Pavarotti Noun 1. Luciano Pavarotti - Italian tenor (born in 1935) Pavarotti , the Bee Gees The Bee Gees were a singing trio of brothers — Barry, Robin, and Maurice Gibb — that became one of the most successful musical acts of all time. They were born on the Isle of Man to English parents, lived in Manchester, England and moved to Brisbane, Australia during , Sheryl Crow and U2. ``The one bright spot for Universal recently has been the music business, so the deal clearly makes sense,'' said Arthur Rockwell, an analyst with Drake Capital. ``If handled right, they will be the dominant force in music.'' Some firings are likely among the 12,400 PolyGram employees and the 3,500 at Universal Music. Seagram executives promised they can generate up to $300 million in annual cost savings through cuts in overhead. ``I think this is a very complementary marriage for Seagram,'' said Stewart Halpern, an analyst with Furman Selz and a former executive with Def Jam Records. ``On paper, it's a very good mix.'' Halpern also endorsed Seagram's timing of the deal, which follows a laggardly year in the worldwide music market. ``It's a great time to be a buyer because people's expectations for the business have been beaten down, so the perception is actually worse than the reality,'' he said. Seagram will finance better than half the deal by spinning off its Tropicana juice business in a public offering, which it believes will fetch $3.5 billion to $4 billion; a sale of about $900 million of Time Warner stock it owns; and sale of PolyGram's fledgling film business, which analysts believe can fetch more than $1 billion. ``These announcements herald an important transformation for Seagram,'' said Chief Executive Officer Edgar Bronfman Two persons are named Edgar Bronfman (father and son). They are the son and grandson of Seagram founder Samuel Bronfman:
The PolyGram transaction comes three years after Montreal-based Seagram first ventured into show business by buying control of Universal Studios for $5.7 billion. That deal provoked widespread anger on Wall Street because Seagram financed it by an $8.7 billion sale of its 23 percent stake in DuPont - a holding now worth over $19 billion. Bronfman began remaking Universal last fall with a complex and widely criticized deal that sold Barry Diller Barry Diller (born February 2, 1942 in San Francisco, California) is an American media executive responsible for the creation of Fox Broadcasting Company. Biography the studio's TV assets for $1.2 billion and a 45 percent stake in the combined assets, including the USA, Sci-Fi and Home Shopping Home Shopping commonly refers to the electronic retailing / home shopping channels industry, which includes such billion dollar companies as HSN, QVC, eBay, ShopNBC, Buy.com, and Amazon.com. cable channels. Last month, Bronfman fired a quartet of top executives at the slumping movie division and is believed to have started buyout talks with London-based EMI (ElectroMagnetic Interference) An electrical disturbance in a system due to natural phenomena, low-frequency waves from electromechanical devices or high-frequency waves (RFI) from chips and other electronic devices. Allowable limits are governed by the FCC. . The British music giant stopped negotiations two weeks ago, presumably pre·sum·a·ble adj. That can be presumed or taken for granted; reasonable as a supposition: presumable causes of the disaster. because Bronfman would not meet the $10 billion asking price. At about the same time, Dutch electronics maker Philips Electronics put its 75 percent of Amsterdam-based PolyGram up for sale in order to focus on its core electronics business. Seagram will pay $59 a share for PolyGram with 80 percent in cash and the rest in stock. Seagram shares rose $3.75 to an all-time high of $44.75, while PolyGram's U.S. stock gained $1.75 to $56.875. THE DEAL AT A GLANCE PolyGram agreed Thursday to be acquired by Seagram for $10.6 billion in deal that radically transforms the beverage giant. PolyGram Company: PolyGram. Headquarters: Amsterdam, the Netherlands. Ownership: 75 percent by Royal Philips NV of the Netherlands. Employees: 12,400; 27 percent in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , 54 percent in Europe, 13 percent in Asia. 1997 Performance: $390 million in profit on sales of $5.5 billion. Music operations: 84 percent of sales. World's largest music company with 17 percent share of market. Performers include Elton John, Hanson, Nine Inch Nails, LL Cool J, Luciano Pavarotti, Bee Gees, Sheryl Crow and U2; labels include Decca, Def Jam, Polydor, A&M, Verve, London, Island, Motown, Mercury, Deutsche Grammaphone. Film-TV operations: 16 percent of sales. Gramercy Pictures, Working Title Films, Propaganda Films, Interscope, PolyGram Films, PolyGram TV. Library has 1,500 films (including ``The Graduate,'' ``When Harry Met Sally'') and 11,000 hours of TV, valued at $500 million; current movie production slate valued at $300 million. Partial holdings: Andrew Lloyd Webber's Really Useful Holdings, Sundance Channel, MTV MTV in full Music Television U.S. cable television network, established in 1980 to present videos of musicians and singers performing new rock music. MTV won a wide following among rock-music fans worldwide and greatly affected the popular-music business. Asia, Motown Cafes. Seagram Company: Seagram Co. Ltd. Headquarters: Montreal. Ownership: 35 percent by the Bronfman family The Bronfman family is one of the most influential Jewish families in the world. It owes its initial fame to Samuel Bronfman (1889-1971), who made a fortune in the alcoholic distilled beverage business during the 20th century through the family's Seagram Company. . Employees: 30,000. 1997 Performance: $502 million profit on revenue of $12.6 billion. Music operations: 1998 sales projected at $1.5 billion, representing 5.6 percent share. Acts include George Strait George Harvey Strait, (born May 18, 1952), is an American country music singer. The native Texan is known for his honky tonk country western sound. Strait is sometimes referred to as the "King of Country" and some critics call Strait a living legend (Bego, 2001). , Reba McEntire, Beck, the Wallflowers, B.B. King, Bush, Erykah Badu. Labels include MCA MCA in full Music Corporation of America Entertainment conglomerate. It was founded in Chicago in 1924 by Jules Stein as a talent agency. In the 1960s it bought Decca Records and Universal Pictures, and today it produces films, music, and television shows. , GRP GRP Group GRP Group (file name extension) GRP Glass Reinforced Plastic GRP Gastrin-Releasing Peptide (biology) GRP Gross Rating Point (advertising) , Geffen, Universal, Interscope. 3,500 employees. Film-TV operations: $3.9 billion in 1998 sales. Universal Studios, currently sixth among majors with 6.3 percent share in 1998. Upcoming projects include ``Out of Sight,'' ``Meet Joe Black,'' ``Patch Adams'' and ``Babe: Pig in the City.'' TV holdings consist of 45 percent of USA Networks, which includes USA, Sci-Fi, Home Shopping channels and productions (``Jerry Springer,'' ``Law & Order,'' ``Hercules,'' ``Xena''). Universal has massive film, TV libraries. Theme parks: $1.1 billion in revenues. Universal Studios Hollywood, Universal Studios Florida; opening $2.6 billion Islands of Adventure next year in Florida; first major U.S. theme park in China opens in July; planning Japanese theme park for 2001. Beverage businesses: $5.1 billion in sales. Chivas Regal Chivas Regal expensive Scotch whisky. [Trademarks: Crowley Trade, 106] See : Luxury , Crown Royal and Seagram's VO whiskeys, Absolut vodka, Captain Morgan Captain Morgan is a brand of rum produced by Diageo. It is named after the 17th-century Caribbean privateer from Wales, Sir Henry Morgan. Captain Morgan's slogan is "Got a little Captain in You?" History rum, Martell cognac; Golden wine coolers; Tropicana juices. CAPTION(S): 5 Photos, box PHOTO (1 -- color) Seagrams President Edgar Bronfman Jr. is flanked by Philips' Cornelis Boonstra, left, and Universal's Frank Biondi Jr. at Thursday's announcement. Marty Lederhandler/Associated Press (2 -- color) HANSON (3 -- color) CROW (4 -- color) JOHN (5 -- color) PAVAROTTI Box: The deal at a glance (see text) |
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