The European Commission has cleared the takeover of music and publishing colossus EMI by Universal Music.
The proposed £1.2bn takeover of the company formerly known as Electric & Music Industries was agreed in November, prompting an investigation on competition grounds.
In order to allay competition fears the Commission has demanded EMI sell off some of its labels, including Chrysalis, Mute and its Classics label, while Universal has been told to get shot of its Sanctuary and Co-Op Music labels.
Those sales would still leave Universal with its hands on Parlophone, the label which signed the Beatles and which currently has Pink Floyd, Kylie Minogue and Blur on its books.
Une autre brique dans le mur
The takeover will boost the European market share of Universal, a subsidiary of French media group Vivendi, but leave it below the crucial 40% barrier widely regarded as the cut-off point for regulatory approval of a merger.
"The very significant commitments proposed by Universal will ensure that competition in the music industry is preserved and that European consumers continue to enjoy all its benefits," EU competition commissioner Joaquin Almunia said.
The takeover still needs to be ratified by the US Federal Trade Commission.
EMI, which once used to boast on its LP (ask your dad - Ed.) sleeves that it was the biggest music organisation in the world, is owned by US bank Citigroup, which picked it up when UK private equity firm Terra Firma overstretched itself to buy the company.
Terra Firma's attempts to run the company on more business-like grounds did not meet with universal approval from EMI's recording artists. Terra Firma's managers were said to be aghast at the amount of money EMI spent on "fruit and flowers", possibly not realising this is music biz code for stimulants and what used to be called "jazz cigarettes".
Universal was suitably chuffed with the decision. "Today's approval brings to an end an extensive EU regulatory review and the acquisition will benefit the artistic community and music industry," a spokesman for the company said.
Smaller record labels were not so pleased with the decision, though they were somewhat mollified by the instruction to sell off some of the labels.
"It's good to see that the Commission has seen this deal as such a threat to the market that it has demanded and received truly swingeing commitments to divestments," said Martin Mills, Chairman of Beggars Group, a label which has been around since the days of punk rock, and which signed the likes of The Associates, Biffy Clyro, The Fall, The Icicle Works, Gary Numan and Tubeway Army.
"However, that should not conceal that fact that Universal's arrogance has paid off for them, that they have destroyed a significant competitor, and that even with these divestments their ability to dominate and control the market has reached even more unacceptable levels.
"Anyone trying to start a new digital service will be realising that very soon, and we will continue to look to the regulators to monitor ongoing behaviour," Mills said, according to the BBC.