At the end of January 2017, BMG fully acquired the American music group BBR Music Group (BBRMG) including established country music labels Broken Bow Records, Stoney Creek Records, Wheelhouse Records, Red Bow Records and the music publisher Magic Mustang Music. Concluding this transaction guarantees BMG a leading role in the capital of country music, Nashville, Tennessee – and provides numerous benefits to the artists and songwriters under contract with BBRMG and BMG. By becoming a part of BMG’s global platform, the customers of BBR Music Group will also benefit from a significantly larger international reach. At BMG, the musicians also have access to a wide range of marketing resources. The transaction will be accounted for as a business combination in accordance with IFRS 3. The preliminary purchase price before purchase price adjustments totals €97 million. As a result of the early stage of the preliminary purchase price allocation, it is currently not possible to quantify any adjustments relating to the fair value prior the preparation of Consolidated Financial Statements and to provide any other information required by IFRS 3 on the acquisition of the BBR Music Group.
The British education company Pearson, which holds an interest of 47 percent in Penguin Random House, informed Bertelsmann on February 1, 2017, of its intent to sell its shareholding and submitted an exit notice as required by contract. As of this date, the structured process begins during which Bertelsmann and Pearson will initially work together to determine the market value of Penguin Random House. Bertelsmann then has the option to accept, refuse or not to respond to the exit notice. If Bertelsmann does not accept the exit notice, Pearson can require a recapitalization of Penguin Random House with the intent to force dividend distribution. At this time, the effect on the future assets, liabilities and financial position of the Group cannot be ascertained.