UK watchdog eyes Sony Music’s purchase of Kobalt divisions

Sony Music has confirmed its acquisition of Kobalt Music’s record music neighbouring rights businesses, however its purchase is now under investigation by the UK’s competition regulator.

The US $430 million deal was announced earlier this year, and would see AWAL and Neighbouring Rights rolled into a new entity connected to Sony’s distribution arm, The Orchard.

Despite the merger, AWAL will continue to sign, develop and market its own artists, and offer global marketing, sync, real-time analytics and radio promotion services.

“AWAL and Neighbouring Rights will become a new division within SME’s suite of independent artist and label services offerings and will be enhanced by the technology and network of SME’s independent music distribution company, The Orchard,” Sony said.

Lonny Olinick will remain AWAL’s CEO, according to a statement from the major.

Now, the UK’s Competition and Markets Authority has served an initial enforcement order over the acquisition. A date for its first phase investigation into the deal is yet to be determined.

“Prior to the closing of the acquisition, the UK Competition and Markets Authority initiated a review of the transaction. SME continues to work closely with the CMA to secure a positive outcome later this year,” a Sony spokesperson said.