BMG to Create World’s Fourth-Largest Music Company

Bertelsmann announced on Tuesday that it will combine its music division BMG with rival Concord, forming the world’s fourth-biggest music company behind Universal, Sony, and Warner.Under the cash-and-stock deal, Bertelsmann will own 67% of the enlarged group, while Concord shareholders will receive a 33% stake plus a one-time cash payment of $1.16 billion.

The combined company is projected to generate pro forma revenue of $2.2 billion and core profit of $730 million in 2026. The transaction ranks among the largest in music industry history.

BMG and Concord are two of the biggest independent music firms. BMG represents artists including Bruno Mars and Kylie Minogue, while Concord holds catalogs from Creedence Clearwater Revival, Miles Davis, R.E.M., and others.

Deal Value and Strategic Benefits

Bertelsmann CEO Thomas Rabe called the merger one of the most valuable in the company’s 190-year history. He declined to disclose an exact valuation but said the enterprise value is in the double-digit billions of dollars.

Music deals are currently valued at earnings multiples of 15 to 20 times, implying a roughly $13 billion enterprise value for this transaction, according to Reuters calculations. Rabe highlighted the sector’s strong 33% core profit margin and said combining the businesses, along with gains from IT systems and artificial intelligence, will further boost profitability.

Job cuts are expected as part of the integration, though Rabe provided no specific figures.

Leadership and TimelineBMG CEO Thomas Coesfeld, who is set to become Bertelsmann’s CEO in 2027, will serve as chairman of the new group. Concord CEO Bob Valentine will become CEO of the combined company.

Bertelsmann expects no major regulatory obstacles and aims to close the deal in September or October 2026.Concord is owned by the Michigan Pension Fund, managed by U.S. asset manager Great Mountain Partners.