BMG to Merge with Concord, Forming Top Independent Firm

Bertelsmann announced Tuesday that its music division BMG has reached a definitive agreement to merge with independent rival Concord, forming what company executives described as the world's leading independent music company and the industry's fourth largest behind Universal, Sony, and Warner.

The cash-and-stock transaction gives Bertelsmann a 67 percent stake in the combined entity, with affiliates of Great Mountain Partners, which manages investments for the Michigan Pension Fund and owns Concord, holding 33 percent along with a one-time cash payment of $1.16 billion. Terms of the deal were not disclosed, though sources estimated its value between $6.6 billion and $7 billion. Bertelsmann Chief Executive Thomas Rabe called it one of the largest deals in the company's 190-year history, with an enterprise value in the double-digit billions based on current music industry earnings multiples of 15 to 20 times.

The merged company, operating under the BMG name with divisions including BMG Publishing and Concord Records, expects pro forma revenue of $2.2 billion and core profit exceeding $730 million in 2026, with a midterm goal of $1.2 billion in EBITDA through organic growth,...