) recently transferred the obligation of paying pensions to about
20,000 employees of EMI Group to Pension Insurance Corporation.
This is anticipated dispose liabilities of approximately £1.5
billion ($2.2 billion). The financial terms of the deal were not
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The deal is the largest since 2011, when Legal & General took
pension liabilities of £1.1 billion from the T&N Retirement
In Nov 2011, Citigroup divided EMI Group into 2 parts and
divested them. Along with the sale of its recorded music division
to UMG, EMI Group's publishing division - EMI Music Publishing -
was sold to a group of investors led by Sony Corporation of
America (SCA), a U.S. subsidiary of
) for $2.2 billion.
The sale of EMI Group's recorded music and publishing assets is
an achievement for Citigroup. In 2007, Guy Hands and his private
equity team at Terra Firma offered $6.7 billion for EMI Group but
failed to meet the loan payments provided by Citigroup to finance
the deal. Consequently, Citigroup took over EMI Group in February
and since then, has been conducting auctions to sell the British
In Jul 2012, the Federal Trade Commisssion (FTC) approved the
deal between Sony and EMI Music Publishing. The agreement gave
Sony the right to purchase EMI Music Publishing from Citigroup.
However, the deal gained sanction from the European Union (EU) in
Apr 2012 on the condition that EMI Group would have to vend the
worldwide publishing rights of artists such as Robbie Williams
and Lenny Kravitz. Consequently, in Oct 2012, Citigroup completed
the sale of EMI Group.
We believe that this vending of liabilities will benefit
Citigroup and go a long way in reducing its expenses amid a
challenging macroeconomic environment.
Citigroup currently carries a Zacks Rank #3 (Hold). Some major
better performing banks include
JPMorgan Chase & Co.
Northern Trust Corporation
). Both these stocks carry a Zacks Rank #2 (Buy).