NEW YORK (AP) — Universal Studios owner Seagram Co. is buying PolyGram NV, the world’s biggest music company, and shedding its Tropicana juice business to make entertainment the main focus of a company best known for its whisky and vodka.
The widely expected deal, announced Thursday, adds PolyGram artists such as Elton John, Luciano Pavarotti, Nine Inch Nails and LL Cool J to Seagram’s Universal Music Group, already home to stars including Bush, Reba McEntire, Erykah Badu and B.B. King.
It also allows Seagram to leapfrog competing conglomerates Time Warner Inc. and Sony Corp. in music while balancing its entertainment business amid a long box-office slump. For the first time, the majority of Seagram’s business will be show business.
“These announcements herald an important transformation of Seagram,” said Edgar Bronfman Jr., whose family built the famed liquor company that produces Seagram’s V.O. and Chivas Regal whisky, Absolut vodka and Captain Morgan rum.
Bronfman brought Seagram into the entertainment industry with the purchase of MCA Inc., now known as Universal Studios, for $5.7 billion in 1995.
Seagram plans to sell its entire stake in Tropicana in a public stock offering shortly to help pay for PolyGram. The company expects to gain $3.5 billion to $4 billion from the sale of Tropicana, which it bought for $1.2 billion in 1988.
Dutch electronics maker Philips Electronics NV, which acknowledged widely reported talks with Seagram last week, agreed to sell its 75 percent stake in PolyGram. The remaining stake in London-based PolyGram, which owns the Motown and Mercury record labels, is publicly held.
The addition of PolyGram will give Seagram annual revenue of about $18 billion. After the sale of the juice business, Seagram would have $16 billion in revenue, with nearly 70 percent coming from entertainment.