Sony and the Michael Jackson Estate announced a deal.
Sony and the Estate of Michael Jackson announced that Sony Corporation of America, Sony's wholly owned subsidiary, signed a binding memorandum of understanding with the estate to obtain full ownership of Sony/ATV Music Publishing LLC by acquiring the 50% interest in Sony/ATV held by the Estate.
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The MOU calls for total payments of 750 million U.S. dollars, which includes a lump sum payment by SCA of approximately 733 million U.S. dollars as well as distributions previously committed to by Sony/ATV to be paid to the Estate.
The sale is the culmination of a process that began in September 2015 when Sony exercised a right that has existed since the joint venture was formed by Michael Jackson and Sony in 1995. This right allows for one partner to purchase the other partner's interest pursuant to a procedure outlined in the Sony/ATV operating agreement.
The parties expect to execute a definitive agreement by March 31, 2016. The closing of the transaction is subject to certain closing conditions, including regulatory approvals. Sony expects that this transaction will have no material impact on its consolidated results forecast for the fiscal year ending March 31, 2016, and its impact on Sony's consolidated financial results for the fiscal year ending March 31, 2017 is currently being evaluated.
"The entertainment businesses have long been a core part of Sony and are a key driver of our future growth," said Kazuo Hirai, President and CEO of Sony Corporation. "This agreement further demonstrates Sony's commitment to the entertainment businesses and our firm belief that these businesses will continue to contribute to our success for years to come."
Michael Jackson died on June 25, 2009. His music legacy is living on and will be living on for decades. Sony's acquisition is clear business indicator for what Michael Jackson fans anyway feel.
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"When Sony first partnered with Michael Jackson 21 years ago to create Sony/ATV Music Publishing, we knew that this company had the ability to reach great heights," said Michael Lynton, CEO of Sony Entertainment, Inc. "This acquisition will enable Sony to more quickly adapt to changes in the music publishing business, while at the same time continuing to be an unparalleled leader in the industry and a treasured home for artists and writers. We want to express our gratitude to the Estate of Michael Jackson and to the Jackson family for their years of partnership. All of us at Sony look forward to continuing to work with the Estate to further Michael Jackson's legacy in many different ways."