EMI has agreed to its acquisition by UK private equity investor, Terra Firma, confirming a 15 per cent decline in recorded music sales and offering an update on its digital music strategy.

The world's third-largest music label, the EMI Group has agreed to a £2.4 billion aquisition under which shareholders will receive £2.65p per share in cash.

The move is likely to generate a battle between Terra Firma and Warner Music as both companies have been attempting to secure an EMI takeover.

The company - which has agreed to sell its music in high-quality format free of digital rights restriction through iTunes, Amazon and other European music services - confirmed the importance of digital sales to its marketing matrix.

Group digital revenue increased by 46.5 per cent from £112.1million to £164.2million on a reported basis representing 9.4 per cent of total underlying Group revenue.

Eric Nicoli, CEO of EMI Group, said: “This has been a challenging year for EMI Group primarily as a result of the worsening market conditions which affected the entire recorded music industry with revenue declines in every major music market across the world."

He added: "We believe that digital sales will continue to grow strongly and are excited about the possibilities offered by partnerships and new business models across both our divisions.
In the UK, EMI revealed that physical sales declined by an estimated 11.8 per cent in the year, while digital sales increased by 79.7 per cent to give a total market decline of 8.8 per cent over the 2006/07 financial year. 

Digital revenue for 2006/07 in the UK grew by 31 per cent over the previous year with fixed line downloads increasing by 16 per cent, mobile downloads increasing by 41 per cent and subscription by 38 per cent over the period.