Sony is going to buy Bertelsmann’s 50 percent stake in their Sony BMG music joint venture business enterprise in a $1.2bn or £613.7m deal and the new company is to be known as Sony Music Entertainment Inc (SMEI). Moreover it will treat as totally-owned subsidiary of Sony Corporation of America.

Sony Music Entertainment Inc (SMEI) is second largest music company after Universal in the world and it will include many artists for example Alicia Keys, Justin Timberlake and Bruce Springsteen.

The agreement ends the tie-up between Bertelsmann and Sony signed in 2004 and the music collection will consist of labels for example RCA Records, Arista Records, J Records, Epic Records, and Columbia Records.

Both parties will carry on sharing manufacturing and distribution program between Bertelsmann’s services company, Arvato Digital Services and Sony’s manufacturing subsidiary, Sony DADC.

Bertelsmann already has been selling off several assets because it asks for to modernize and streamline its running business and the company hopes that this progress is consistent with their new growth plan, strategy and it will make able them to focus on their specific growth areas but the deal requires a regulatory approval for authorization and the deal is completed the last part of 2008.

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