For Immediate Release 

November 11, 2011



Vivendi and Universal Music Group (UMG) to Purchase EMI Music 

London, Paris, New York -- Vivendi and its subsidiary, Universal Music Group (UMG), announced today that they have signed with Citigroup Inc. (“Citi”) a definitive agreement to purchase EMI’s recorded music division for a total consideration of £1.2 billion representing 7 x EBITDA prior to synergies.

EMI Group is one of the world’s most prominent music companies, possessing a rich musical legacy. Its recorded music division, EMI Music, operates around the world and represents artists spanning all musical tastes and genres through record labels including Angel, Astralwerks, Blue Note, Capitol, Capitol Latin, Capitol Records Nashville, EMI Classics, EMI CMG, EMI Records, EMI Records Nashville, Manhattan, Parlophone, Virgin Classics and Virgin Records.

Jean-Bernard Lévy, CEO of Vivendi, stated: “We are very proud to welcome EMI into the Vivendi family. We all respect the labels within EMI as well as the artists and employees who contribute to its success. They will find within our Group a safe, long-term home, headquartered in Europe.” He then added: “We plan to acquire EMI’s recorded music division on attractive terms, adhering to our principle of total financial discipline. We are confident that we will be able to create additional value for our shareholders thanks to our
knowledge of the industry and our proven track record of successful integration. Lucian Grainge’s personal experience and heritage will be a major asset in making the combined entity a great success.”

Lucian Grainge, Chairman & CEO of Universal Music Group, added: "This is a historic acquisition for UMG and an important step in preserving the legacy of EMI Music. For me, as an Englishman, EMI was the  reeminent music company that I grew up with. Its artists and their music provided the soundtrack to my teenage years. Therefore, UMG is committed to both preserving EMI's cultural heritage and artistic diversity and also investing in its artists and people to grow the company's assets for the future. As a result, we will be
better positioned to fully capitalize on the many new and exciting opportunities in the current marketplace, and also able to better serve our artists, songwriters and business partners, while offering fans even more choice.”

Stephen Volk, Chairman of the Board of EMI Group and Vice Chairman of Citigroup, added: “We believe that this transaction accomplishes Citi's objective of maximizing the value of EMI, giving EMI Music a partner in Universal Music that appreciates EMI’s rich cultural legacy, its incredible stable of musical talent, and its employees who work so hard to deliver successful outcomes for the artists they represent. We are grateful to Roger Faxon, his management team and all of EMI’s staff for the continued success of this business during Citi's ownership."

The transaction has been approved both by the Management Board and the Supervisory Board of Vivendi. Closing of the agreement remains subject to a number of conditions, including approvals of regulatory authorities in the countries and continents concerned.

Vivendi will finance the transaction from its existing credit lines. Concurrently, Vivendi and UMG will also sell 500 million euros worth of non core UMG assets.

Vivendi and UMG have been advised by Allen & Co. and SJ Berwin on this transaction. Citi Global Banking acted as financial advisor to Citi and EMI. Clifford Chance LLP, Shearman & Sterling LLP and Freshfields Bruckhaus Deringer LLP acted as legal advisors to Citi and EMI.

About Vivendi 

The best emotions, digitally

Vivendi is at the heart of the worlds of content, platforms and interactive networks.

Vivendi combines the world leader in video games (Activision Blizzard), the world leader in music (Universal Music Group), the French leader in alternative telecoms (SFR), the Moroccan leader in telecoms (Maroc Telecom Group), the leading alternative telecoms provider in Brazil (GVT) and the French leader in pay-TV (Canal+ Group).

In 2010, Vivendi achieved revenues of €28.9 billion and adjusted net income of €2.7 billion. The Group has over 51,300 employees.

www.vivendi.com

About Universal Music Group 

Universal Music Group is the world's leading music company with wholly owned record operations or licensees in 59 territories. Its businesses also include Universal Music Publishing Group, the industry's leading global music publishing operation.

Universal Music Group's record labels include A&M/Octone, Decca, Def Jam Recordings, Deutsche Grammophon, Disa, Emarcy, Fonovisa, Geffen Records, Interscope Records, Island Records, Lost Highway Records, Machete Music, MCA Nashville, Mercury Nashville, Mercury Records, Polydor Records, Motown, Universal Music Latino, Universal Republic and Verve Music Group as well as a multitude of record labels owned or distributed by its record company subsidiaries around the world. UMG's catalog is marketed through two distinct divisions, Universal Music Enterprises (in the U.S.) and Universal Strategic

Marketing (outside the U.S.). Universal Music Group also includes Global Digital Business, its new media and technologies division; Bravado, its merchandising company; and Twenty-First Artists, its full service management division.

Universal Music Group is a fully owned subsidiary of Vivendi.

About Citi 

Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube:
www.youtube.com/citi | Blog: http://new.citi.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi

Important disclaimer

Disclaimer Forward Looking Statements. This press release contains forward-looking statements with respect to Vivendi`s financial condition, results of operations, business, strategy and plans. Although Vivendi believes that such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside our control, including but not limited to the risks regarding antitrust and regulatory approvals as well as the risks described in the documents Vivendi has filed with the Autorité des Marchés Financiers (French securities regulator) and which are also available in English on our web site (www.vivendi.com). Investors and security holders may obtain a free copy of documents filed by Vivendi with the Autorité des Marchés Financiers at www.amf-france.org, or directly from Vivendi. The present forward-looking statements are made as of the date of this press release and Vivendi disclaims any intention or obligation to provide, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

*fun fact> When The Beatles Invaded the U.S.

In these days of nearly instant communication when you can jump on the internet, post a video on Facebook and share music with friends that you’ve never met it’s hard to imagine a time when things were different.  

But try to, just for a second…

In the early 60’s it was uncommon for a band from Europe to have success in the United States.  Most music went from the United States out to the rest of the world.  By 1963 the Beatles were a sensation in the U.K., their album, Please Please Me, was at #1 on the U.K. album chart, a position it would retain 30 weeks and you would think that bringing the Beatles to America would have been only an afterthought, but while EMI was enjoying the album sales in the UK, Capital Records in the U.S. was concerned that they would not have the same success and were hesitant to release the music in the U.S.

Brian Epstein, manager for the Beatles flew to the U.S. in November 1963 and met with the president of Capital Records and convinced him to release the single “I Want to Hold Your Hand.”  The song was released on December 26th and had immediate success, selling a quarter million copies in the first three days. 

On Feb7th, 1964 the Beatles finally landed in America.  Their concerns for failure were unrealized as they were greeted by thousands of screaming fans at John F. Kennedy International Airport in New York City and two days later performed for an audience of 74 million viewers on The Ed Sullivan Show.

Shortly after returning to the U.K. from America, on April 4th 1964, The Beatles held the top five places on Billboard’s U.S. singles chart with “Can’t By Me Love” (#1), “Love Me Do” (#2), “Roll Over Beethoven” (#3), “I Want to Hold Your Hand” (#4) and “Please Please Me” (#5).

Hard to imagine…

Citibank Takes Control of EMI

This just in from the AP…

LOS ANGELES (AP) Citigroup Inc. has taken over debt-strapped EMI Group Ltd., closing a disastrous purchase of the music label by Guy Hands, founder of British private equity firm Terra Firma.

The foreclosure by Citigroup, EMI's main lender, brings the label of British acts such as The Beatles and Pink Floyd under American control until a new buyer can be found.

The takeover had been long expected, but came more than a month before Terra Firma Capital Partners Ltd. officially defaulted on roughly 3.4 billion pounds ($5.48 billion) of borrowings it took on to buy the label in 2007.

Citigroup's move eliminates some uncertainty over EMI's future, and restructures EMI by reducing its debt by 65 percent to 1.2 billion pounds. Citigroup booked a 2.2 billion pound loss, while Terra Firma saw its 1.75 billion pound investment evaporate.

The agreement leaves EMI, which also represents Lily Allen, Katy Perry, Coldplay and dozens of other acts, with more than 300 million pounds of available cash, enough to fund its operations, and a sustainable level of debt.

For now, it won't have to rush into the arms of a financial savior, although companies like Warner Music Group Corp. and private equity firm Kohlberg Kravis & Roberts have been jockeying to buy the company.

EMI now has "the ability to invest in and grow its business," said Stephen Volk, the Citigroup vice chairman who will become the chairman of EMI's holding company, Maltby Acquisitions Ltd., in a statement. "This is a positive development for EMI, its employees, artists, songwriters and suppliers."

EMI's chief executive, Roger Faxon, said in a statement that the restructuring "has given us one of the most robust balance sheets in the industry."

Uncertainty over its future was seen as a major distraction for EMI, which in recent years lost business from the Beatles' Paul McCartney and rock band Queen.

The move also came after a jury in New York found in November that the U.S. bank did not fool Hands into buying EMI at an inflated price. Hands had testified that Citigroup dealmaker David Wormsley had misled him about the number of suitors for the label, while Citigroup said the accusations were an attempt to gain leverage in restructuring talks. Hands appealed the verdict earlier this month

The State of the Music Industry

The bleeding hasn’t stopped for the music industry as album sales plummeted 12.8% and digital track sales flattened to a meager 1% gain for 2010, according to figures issued Wednesday by Nielsen SoundScan. 

Album unit sales dropped to 326.2 million, from 373.9 million units in 2009. The 2010 drop nearly matched 2009's decline of 12.7%.

Overall album sales, physical releases and digital "track equivalent albums" -- fell 9.5%, to 443.4 million units from 489.8 million in 2009. This compared to a drop of 8.5% in 2009.

Just four albums sold more than 2 million units last year; the No. 10 bestseller, Ke$ha's "Animal," barely inched past the 1 million mark, with 1.14 million sold.

In terms of 2010 market share, Universal Music Group led the four majors with 31.4% of albums sold. Sony Music Entertainment ranked No. 2 with 27.4%, with Warner Music Group trailing behind with 19.8% and EMI Music a distant fourth with 9.6%. The independent sector outdid EMI with an 11.6% share.

Rapper Eminem claimed the 2010 album sales championship, moving 3.4 million copies of "Recovery." Country acts trailed only slightly among the top sellers: Lady Antebellum's "Need You Now" placed second with 3 million, while Taylor Swift's late-year release "Speak Now" came in a close third with 2.96 million.

Swift was the top-selling album artist of '10, notching total sales of 4.47 million, followed by Eminem (4.32 million), Lady Antebellum (3.85 million), Justin Bieber (3.73 million) and the cast of the Fox series "Glee" (3.6 million). Swift has sold more than 4 million albums per year for the past three years.

Just four albums sold more than 2 million units last year; the No. 10 bestseller, Ke$ha's "Animal," barely inched past the 1 million mark, with 1.14 million sold.

* news > LONG LIVE THE KING

Regardless of how you feel about Michael Jackson and his personal life, what he has done for the record industry since his death has been staggering. SoundScan numbers for 2009 are out and Michael again is king.

Market share by record label is pretty much stagnant these days since the advent of file sharing, the digital age and iTunes. At the end of 2008 Universal held the number one spot with 31.5% percent of the market, followed by Sony, 25.3%, Warner, 21.3% and EMI with 9%. Indie labels round up the rest of the sales claiming a little under 13% of the market.

Since his death in June Michael has sold over 10 million albums, catalog sales that rival the top artists with new releases. You don’t see him in the top ten charts because his material - previously released is considered catalog, a classification reserved for albums that have fallen off the charts. Michael’s catalog sales on their own lifted the record industry a staggering 2.8% in 2009 and gave Sony a nearly 3% market share edge.

While Universal is still at the top of the heap, it took the biggest hit losing about 1.3% of it’s market share. Indie labels also took a big hit with about the same loss of market and Warner followed with a .75% loss. Amazingly EMI was able to gain about .25% in sales on the larger labels. So, rounding out 2009 - Universal still sits at the top of the hill with 30.2% of the market followed by Sony now at 28.5%, Warner at 20.5% and EMI at 9.2%. Indie sales round out the market at just over 11.5%.

No doubt some execs at Sony have Michael Jackson to thank for their Christmas bonuses.