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Warner Music being sold amid industry decline

Warner Music Group Corp., the world’s third-largest recording company with such artists as Eric Clapton, Michael Buble and Paramore, is being sold for about $1.3 billion as a global decline in CD sales weighs down the industry.

Warner Music Group Corp., the world’s third-largest recording company with such artists as Eric Clapton, Michael Buble and Paramore, is being sold for about $1.3 billion as a global decline in CD sales weighs down the industry.

Len Blavatnik’s Access Industries will pay $8.25 a share and take on about $2 billion in Warner debt and $320 million in cash. The total values the company at about $3 billion.

The deal comes as U.S. sales of recorded music have flattened to half what they were about a decade ago. Rising download sales last year were offset by the collapse in the popularity of ringtones, and CD sales continue to fall.

That means Blavatnik will have to cut staff and other expenses and hope a new wave of innovation will carry digital music sales higher.

The Russian-born Blavatnik, 53, is a former board member who was part of the group that bought Warner Music in 2004. He has about a two per cent stake in the company.

The sale ends a seven-year run by investors led by Edgar Bronfman Jr., who purchased the company from Time Warner Inc. with private equity backing for $2.6 billion. They took the company public a year later to help recoup their investment. There are now just 3,700 employees, down from 5,100 in late 2003.
Bronfman will remain CEO after the sale.

 
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