Universal Music Group Inc. confirmed on Monday that it will acquire online music company EMusic.com Inc. for an estimated US$24.6 million.
Universal Music Group, which is owned by Vivendi Universal, will pay cash for all of EMusic's 43.2 million shares of stock priced at $0.57 a share, the companies said in a statement. Vivendi is partnering with Sony Music Entertainment Inc. in an online music venture called Duet, which will offer subscription-based digital downloads and streams.
The Washington Post last week quoted an unnamed source saying that EMusic would become a distribution site for Duet music. EMusic acknowledged last week that it had agreed to be acquired. Grace Salafia, a spokeswoman for Universal Music Group, told IDG News Service Monday that The Washington Post report about how EMusic will be incorporated is "speculation" and said it is "premature" to comment on plans for EMusic.
In the deal, Universal Music Group will gain the rights to the Rollingstone.com site and brand, EMusic's 165,000 track music collection, its estimated 10,000 subscribers and jazz site DownBeat.com, Salafia said.
EMusic is strapped for cash and is losing the online music war to Napster Inc.'s music service. At the end of March, the company reported it had $10.9 million. Shares of EMusic (EMUS) traded up $0.09, or 21 percent, to $0.53 a share at midday Monday.