Sony remains “number one” with $2.3bn acquisition

BY Fraser Tennant

In a $2.3bn deal which the multinational conglomerate says represents its commitment to its writers and artists, as well as to the music business as a whole, Sony Corporation has acquired a controlling stake in EMI Music Publishing – one of the world’s largest music publishing companies.

Once complete, the transaction will see Sony, which already holds the publishing rights to The Beatles, among many others, obtain a catalogue of more than two million songs, including hits by Queen, Kanye West, Alicia Keys, Drake, Sam Smith, Pink, Pharrell Williams and Calvin Harris.

“We are thrilled to bring EMI Music Publishing fully into the Sony family and maintain our number one position in the music publishing industry,” said Kenichiro Yoshida, president and chief executive of Sony Corporation. “I would also like to convey my gratitude to Mubadala, our equity partner in EMI Music Publishing, for sharing our long-term perspective on the potential success of music publishing and their support as we grew the business.”

Over the past six years, Mubadala Capital – the financial investment arm of Mubadala – and Sony have worked together as partners to create value alongside Sony/ATV, Sony’s music publishing arm. 

“EMI Music Publishing has been a successful investment for Mubadala,” said Hani Barhoush, head of Mubadala Capital. “I would like to personally extend my appreciation to the leadership at Sony and Sony/ATV, who have been instrumental in administering the EMI Music Publishing catalogue, as well as shaping the music landscape on a global basis. They have been tremendous partners to us.”

The Sony/Mubadala partnership, coupled with the global rise of streaming and paid streaming services, have led to an appreciation in value of the EMI Music Publishing catalogue as millions of new consumers have been provided access to innovative distribution channels. “The sale of our consortium’s interest in EMI represents a milestone for Mubadala and our private equity business,” added Adib Mattar, head of private equity for Mubadala Capital and chairman of EMI Music Publishing.

Mr Yoshida concluded: “In the entertainment space, we are focusing on building a strong intellectual property (IP) portfolio, and I believe this acquisition will be a particularly significant milestone for our long-term growth.”

News: Sony takes controlling stake in EMI Music Publishing

UK financial sector wants immigration reform

BY Richard Summerfield

With less than a year to go until the UK’s exit from the European Union becomes official, there is still a great deal of uncertainty surrounding the process. However, the financial services sector, given its importance to the UK’s economy, is making its feelings known. A new report from EY and TheCityUK, ‘The UK’s future immigration system and access to talent’, has suggested that the government must urgently review the country’s immigration system if it hopes to succeed post-Brexit.

Ensuring that the UK’s financial sector is able to access skilled overseas talent is vital to the UK maintaining its pre-eminence as the leading international financial centre, the report claims. The sector raises more than £70bn per year in taxes. However, the cost of bringing skilled European workers into the UK could increase by up to 300 percent if existing immigration rules are applied unchanged to European citizens, and if planned Tier 2 visa fee increases come into effect.

“As we approach Brexit, there is a real need to review and reform the UK’s immigration policy to ensure it supports businesses and skilled overseas talent looking to contribute to the UK economy. The current Tier 2 visa system is out of date – we need a much more flexible and dynamic system, which responds to today’s very real skills shortages, particularly around technology, which will worsen if not addressed,” said Margaret Burton, a partner at EY. “People are the foundation of any company. Without access to the right talent, the UK’s future position as a global business leader will be under threat.”

“Britain’s success is built on openness,” said Miles Celic, chief executive officer of TheCityUK. "Being able to attract and retain the most talented people with the right skills, from both the UK and overseas, is a top priority for business leaders across the industry. The UK’s ability to draw global talent has long been a competitive advantage. Losing this could undermine Britain’s position as the world’s leading financial centre. A basic immigration system that is fit for the UK’s needs, future focused and fair is essential. Simply applying the current immigration system for non-European citizens to European citizens after Brexit will not work. Doing so is likely to worsen existing skills shortages and make it much harder to attract the talent British firms need to compete on the world stage following Brexit.”

The report sets out nine key recommendations which could reform the UK’s immigration system and still allow firms to access global talent while reducing the skills shortages which are holding back UK economic and productivity growth.

However, the financial services space is not the only industry demanding the government take action. The healthcare and agriculture sectors have also demanded unimpeded access to international talent after Brexit. Such demands will place additional, considerable strain on the government which is already struggling to map out a Brexit which will please ‘Leave’ voters, many of whom want tougher immigration controls.

Report: The UK’s future immigration system and access to talent

DHS unveils new cyber security strategy

BY Richard Summerfield

This week the US Department of Homeland Security unveiled a new national strategy for addressing the growing threat of cyber security risks.

According to the report, by 2020 more than 20 billion devices are expected to be connected to the internet, and a result of this growth and the increasing variety of these devices, a new approach to cyber security is required. The new strategy was released in compliance with the fiscal 2017 National Defence Authorisation Act, the DHS noted, and has been designed to prioritise and harmonise the department’s programming, planning, operational and budgeting efforts.

The DHS, which is responsible for securing federal networks and critical infrastructure from cyber sabotage, has identified five key areas of risk, or ‘pillars’, that it hopes to manage though the strategy, including risk identification, vulnerability reduction, consequence mitigation, enablement of cyber outcomes and threat reduction. These risk areas are particularly noteworthy given the evolution of cyber criminality in recent years. In particular, the strategy refers to the breadth of attempted cyber attacks on US government networks, which increased more than tenfold between 2006 and 2015.

Homeland Security secretary Kirstjen Nielsen said: “The cyber threat landscape is shifting in real-time, and we have reached a historic turning point. Digital security is now converging with personal and physical security, and it is clear that our cyber adversaries can now threaten the very fabric of our republic itself. That is why DHS is rethinking its approach by adopting a more comprehensive cybersecurity strategy. In an age of brand-name breaches, we must think beyond the defence of specific assets — and confront systemic risks that affect everyone from tech giants to homeowners. Our strategy outlines how DHS will leverage its unique capabilities on the digital battlefield to defend American networks and get ahead of emerging cyber threats.”

The announcement of the new strategy came on the same day that the White House removed the cybersecurity coordinator position from the National Security Council (NSC), as it felt that the role was no longer necessary.

NSC spokesman Robert Palladino said: “The National Security Council’s cyber office already has two very capable Senior Directors. Moving forward, these Senior Directors will coordinate cyber matters and policy. As they sit six feet apart from one another, they will be able to coordinate in real time. Today’s actions continue an effort to empower National Security Council Senior Directors. Streamlining management will improve efficiency, reduce bureaucracy and increase accountability.”

Report: US Department Of Homeland Security Cybersecurity Strategy

PE giant Silver Lake acquires Zoopla parent in £2.2bn deal

BY Fraser Tennant

In a move that is expected to give a massive boost to the PropTech sector, US private equity (PE) firm Silver Lake is to acquire ZPG, parent company of Zoopla, one of the UK’s largest internet property search companies.

The deal will see the PE giant pay £2.2bn for ZPG, a leading residential property data and software provider with a range of products, including, in addition to Zoopla, the PrimeLocation, uSwitch and SmartNewHomes websites.

Since its initial public offering in 2014, ZPG has evolved and diversified and made significant progress toward becoming the platform of choice for consumers and partners engaged in property and household decisions. Founded in 2007, ZPG's websites and apps attract over 50 million visits per month and over 25,000 business partners use its services.

“ZPG is a great growth technology company,” said Simon Patterson, managing director of Silver Lake. “It has established strong positions in property classifieds, home and financial services markets by innovating in product and marketing. We are delighted to partner with Alex Chesterman, one of Europe’s leading and most accomplished technology entrepreneurs, to invest in ZPG’s continued growth.”

Founded in 1999 and headquartered in Silicon Valley, Silver Lake is the global leader in technology investing, with an estimated $39bn in combined assets under management and committed capital.

“I  am firmly of the belief that ZPG will benefit from Silver Lake’s technology expertise and global network, which will help accelerate our growth,” said Alex Chesterman, founder and chief executive of ZPG. “The terms of the acquisition represent an attractive premium that recognises the quality of ZPG’s businesses and the strength of its future prospects and allows shareholders to realise today in cash the potential future value of their holdings.”

The acquisition is subject to conditions, including receipt of merger control approval from the European Commission and the Financial Conduct Authority (FCA), and is expected to be completed during the third quarter of 2018.

Mr Chesterman concluded: “I am very excited about the opportunity this deal offers to our employees, customers and partners as we move to the next stage of ZPG’s development and growth.”

News: Zoopla, Uswitch and Primelocation owner ZPG sold for £2.2bn

Vodafone strikes €18.4bn deal for Liberty Global’s European operations

BY Fraser Tennant

In an €18.4bn deal which expands its mobile, TV and broadband services in Europe, multinational telecommunications conglomerate Vodafone has agreed to acquire US firm Liberty Global’s operations in Germany, the Czech Republic, Hungary and Romania.

The total enterprise value of the transaction is expected to comprise approximately €10.8bn of cash consideration paid to Liberty Global and €7.6bn of existing Liberty debt, subject to completion adjustments. Once complete, Vodafone will become the leading next generation network (NGN) owner in Europe, with 54 million cable/fibre homes ‘on-net’ and a total NGN reach of 110 million homes and businesses.

In Germany, the combination of Vodafone and Unitymedia (which runs Liberty Global's operations in Germany as well as being the country’s second largest cable operator) will bring Gigabit connections to around 25 million German households by 2022. In Central and Eastern European (CEE) markets, the transaction will accelerate the availability of converged fixed, mobile and TV services.

“This transaction will create the first truly converged pan-European champion of competition,” said Vodafone Group chief executive Vittorio Colao. “It represents a step change in Europe’s transition to a Gigabit Society and a transformative combination for Vodafone. We are committed to accelerating and deepening investment in next generation mobile and fixed networks, building on Vodafone’s track record of ensuring that customers benefit from the choice of a strong and sustainable challenger to dominant incumbent operators.”

Vodafone has also said that management and employees of the acquired Liberty Global businesses will have the opportunity to play an integral role within the combined company in each country and across the wider Vodafone Group.

“We have a rich history at Liberty Global of successfully developing and reshaping our business to drive innovation, advance customer services and create significant value for shareholders,” said Mike Fries, chief executive of Liberty Global. “This is one of those moments. Now more than ever, Europe needs strong competition from scaled national challengers willing and able to invest in next-generation wireless, video and broadband services.”

The Vodafone/Liberty Global transaction is subject to regulatory approval by the European Commission and is anticipated to be completed in mid-2019.

Mr Fries added: “This is also an important and exciting transaction for our customers and employees. In each of these markets, the combination of Liberty Global and Vodafone’s businesses will transform the competitive landscape and bring a new level of convergence to customers.”

News: Vodafone makes €18bn swoop on Liberty Global cable networks