On June 11, 2002, the Zomba Music Group (Britney Spears, Backstreet Boys, Black Crowes and many other groups), an independent music label, announced that it has applied its long-standing option with Bertelsmann's music division, BMG Music, to acquire the remaining shares of Zomba that Bertelsmann doesn't currently own.
The business relationship between Zomba and Bertelsmann date back to the mid-1980s. In 1991, BMG acquired a 25% stake in Zomba's music-publishing division; in 1996, it acquired a 20% stake in Zomba's record division. Since 1996, Zomba has had an option that required Bertelsmann to acquire the remaining stake in both Zomba's record and music-publishing divisions, which will expire in December 2002.
Zomba's chairman and chief executive, Clive Calder, stated in a release: "With its outstanding executives and creative talent, Zomba should add a lot of value to Bertelsmann's music division, BMG. While the exercise of this option will undoubtedly be a surprise to many in the music industry, this is a natural culmination of many years of close business ties and a complex series of agreements negotiated 12 years ago."
The transaction is expected to close later this year. Both companies have agreed to not comment further on the pending acquisition due to the ongoing legal and regulatory processes involved.