Universal Faces Fresh Hurdles in Europe on EMI Deal

Universal Music Group's plan to acquire EMI Music suffered a series of setbacks late last week, according to people familiar with the matter, raising the possibility that the music giant will need to pay nearly the entire $1.9 billion purchase price before antitrust regulators in Europe have decided whether to allow the deal to go through.

Universal has been hit by a double whammy. Antitrust regulators in Europe have expressed doubts about the company's plan to reduce its market share below 40%, possibly requiring the review process to extend beyond its planned Sept. 6 conclusion. Universal is still due to pay EMI Music's owner, Citigroup, more than $1.7 billion of the purchase price by early September, regardless of whether regulators have approved the deal by then. Citi and Universal, which is part of Vivendi SA, have discussed extending the payment deadline by about two months, but haven't reached an agreement. Universal appeared to be surprised by a recent change in the regulators' tone, and uncertain exactly how to proceed.