Warner Music Group Sold For $2.6 Billion

Edgar Bronfman's Lexa Partners and a group of investors have bought Warner Music Group for $2.6 billion in cash. The purchase has created one of the world's largest independent record companies.Warner Music Group is home to such rappers as Missy Elliot, Nappy Roots, Fabolous, Sean Paul, T.I., Lil Kim and others."Warner Music Group is one of the world's greatest recorded music and music publishing companies, and we have great faith in its potential for growth as an independent company and in the long-term opportunities of this industry," Edgar Bronfman, Jr. said. "We have brought together a highly sophisticated and well-financed group of investors to support the business. I personally look forward to working with Roger Ames and his outstanding management team to build on Warner Music's strengths, including its distinguished tradition of entrepreneurship and artist development. Together, we will continue to drive towards Warner Music's full potential."The purchase includes Warner Bros., Atlantic and Elektra Records and Warner/Chappell Music publishing.Time Warner's Chairman and CEO Dick Parsons said that he was happy to put the music division into capable hands and that despite his fondness for the company, believed that the transaction was in the best interest of the company's shareholders."Not only will it greatly enhance our financial flexibility, it also will enable us to pursue higher growth opportunities in our other lines of business," Parsons said. "We expect to continue to work closely with Warner Music, and we are happy to have the option to participate in the music industry's eventual recovery."Time Warner has the option to buy up to 15% of the company at any time during the three years following closing, and as much as 19.9% of the company under certain circumstances.Bronfman's family founded the Seagram's Company. Almost 10 years ago, he steered the company away from the liquor business, paid Japanese goliath Matsushita almost $6 billion dollars and took an 80 percent stake in Universal's music and movie business.Bronfman sold Seagram and Universal to Vivendi in 2000 and is currently a board member.