As predicted, the European Commission last night approved the merger between BMG and Sony.
The move will create the world's second largest record company, which will be known as Sony BMG and have control of over 22 per cent of the global market. The two companies must still achieve approval from the US Federal Trade Commission (FTC) for the deal, the Financial Times reports.
Sony Music chairman and CEO Andy Lack described the European decision as a gesture of recognition that the creation of Sony BMG "is an appropriate and necessary response to current market conditions." The merger is expected to see the company slash 2,000 jobs for annual savings of "around $350 million," the report says.
The Commission declared against a multitude of objections made against the merger, with Apple expressing its own fears that the deal will give the new formation too much power to affect the market, in particular the digital music market.
"The Commission will keep a close watch on the music sector as it becomes even more concentrated and would very carefully scrutinize any further major concentration in the industry," the Commission said.