FRANKFURT, Germany (AP) -- Zomba Music Group, the record company of Britney Spears, 'N Sync and the Backstreet Boys, is exercising an option to sell out to BMG, the music division of German media conglomerate Bertelsmann AG.
Guetersloh-based Bertelsmann, which already holds a minority stake in Zomba, will buy the shares it doesn't already hold from majority owner Clive Calder, according to a joint statement released late Tuesday.
The companies, both of which are privately held, wouldn't announce the price of the purchase. The Wall Street Journal and Financial Times reported it was around $3 billion.
Bertelsmann officials couldn't immediately be reached Wednesday.
Bertelsmann's BMG Entertainment already distributes Zomba's recordings in the United States and Canada. It would acquire full ownership of Zomba -- the world's largest independent record company -- at a time when the music business is facing falling record sales blamed on illegal copying of compact discs and digital piracy. But Bertelsmann can afford the deal, having reaped $6.75 billion for selling its stake in AOL's European arm to AOL Time Warner.
"With the acquisition of Zomba's music business, Bertelsmann will strengthen its global market position for the long term," the company said. BMG, the smallest of the big five record companies, has tried to expand by merging with competitor EMI but was blocked by antitrust authorities.
Bertelsmann bought a 25 percent stake in Zomba's music publishing business in 1991 and a 20 percent stake in its recording unit in 1996, the company said. The sale is subject to approval by antitrust authorities and to final review by the companies.
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