Sony to Purchase Bertelsmann's 50-Percent Stake in Sony BMG

Sony to Purchase Bertelsmann's 50-Percent Stake in Sony BMG

Music Company to Become Wholly Owned Subsidiary of Sony Corporation of America

NEW YORK, Aug. 5 /PRNewswire/ -- The international media and entertainment companies Sony Corporation and Bertelsmann AG today announced that Sony has agreed to acquire Bertelsmann's 50 percent stake in Sony BMG. The music company, to be called Sony Music Entertainment Inc. (SMEI), will become a wholly owned subsidiary of Sony Corporation of America. Sony and Bertelsmann AG originally created the Sony BMG joint venture in August 2004.

"Music has been a vital and vibrant part of Sony's culture for over twenty years. This acquisition will allow us to achieve a deeper and more robust integration between the wide-ranging global assets of the music company and Sony's products, operating companies and affiliates. It enables us to offer a total entertainment experience to consumers," said Sir Howard Stringer, Chairman and CEO, Sony Corporation. "Over the past four years, Sony BMG has undertaken a very successful restructuring, streamlined operations and developed innovative digital partnerships that ensure it will continue to be a leader in the creation and distribution of music worldwide. It is an organization rich in talent, ideas and enthusiasm, and is a strong fit with our overall business strategy."

"After a careful and thorough review, we made the strategic decision to sell our investment in this joint venture to Sony, a step that we believe will benefit the stakeholders of both our companies," stated Hartmut Ostrowski, Chairman and CEO of Bertelsmann AG. "This move is consistent with our new growth strategy and will enable us to focus on our defined growth areas. Sony has been an excellent partner, and they are the right company to take this business to the next step and ensure that it realizes its full value and potential. We look forward to witnessing Sony Music Entertainment's exciting future under Sony's ownership."

Once the transaction is completed, Sony Music Entertainment Inc. will be comprised of premier music labels such as: Arista Records, Columbia Records, Epic Records, J Records, Jive Records, RCA Records and Zomba. Key recording artists will include Celine Dion, Alicia Keys, Yo-Yo Ma, Bruce Springsteen, Justin Timberlake, Usher and Jay Chou.

As part of the transaction, the parties have also agreed to continue to share the company's manufacturing and distribution requirements between Sony's manufacturing subsidiary, Sony DADC, and Bertelsmann's services company, Arvato Digital Services GmbH ("Arvato"), by extending the agreements with Arvato for additional terms of up to six years. In addition, Bertelsmann will be taking over selected European music catalog assets from Sony BMG.

Consummation of the transaction remains subject to a number of conditions, including approvals of regulatory authorities in certain jurisdictions.

About Bertelsmann AG

Bertelsmann is an international media company encompassing television (RTL Group), book publishing (Random House), magazine publishing (Gruner + Jahr), music (BMG), media services (Arvato), and media clubs (Direct Group) in more than 50 countries. Bertelsmann's claim is to inspire people around the world with first-class media and communications offerings - entertainment, information and services - and occupy leading positions in its respective markets. The foundation of Bertelsmann's success is a corporate culture based on partnership, entrepreneurial spirit, creativity, and corporate responsibility. The company strives to bring creative new ideas to market and create value. www.bertelsmann.com

About Sony Corporation

Sony Corporation is a leading manufacturer of audio, video, game, communications, key device and information technology products for the consumer and professional markets. With its music, pictures, computer entertainment and on-line businesses, Sony is uniquely positioned to be the leading electronics and entertainment company in the world. Sony recorded consolidated annual sales of approximately $88 billion for the fiscal year ended March 31, 2008. Sony Global Web Site: www.sony.net

For further questions, please contact:

Bertelsmann AG

Andreas Grafemeyer
Senior Vice President Media Relations
Phone: +49 - 52 41 / 80 24 66
andreas.grafemeyer@bertelsmann.de

Tobias Riepe
Vice President Media Relations
Phone: +49 - 52 41 / 80 77 69
tobias.riepe@bertelsmann.de

Bertelsmann AG/New York

Kelly Sullivan
Senior Managing Director
Joele Frank, Wilkinson Brimmer Katcher
Phone: +1 - 212 / 895 - 86 59
ksullivan@joelefrank.com

Bertelsmann AG/UK

Angus Maitland
Executive Chairman
Maitland
Phone: +44 - 20 / 73 79 51 51
amaitland@maitland.co.uk

Sony/New York

Lisa Gephardt
Phone: +1 - 212 / 833 - 68 26
Lisa_gephardt@sonyusa.com

Mack Araki
Phone: +1 - 212 / 833 - 68 21
Mack_araki@sonyusa.com

First Call Analyst:
FCMN Contact:

Source: Bertelsmann Media Worldwide

CONTACT: Andreas Grafemeyer, Senior Vice President Media Relations,
+49-52 41 / 80 24 66, andreas.grafemeyer@bertelsmann.de, or Tobias Riepe, Vice
President Media Relations, +49-52 41 / 80 77 69, tobias.riepe@bertelsmann.de,
both of Bertelsmann AG; or Kelly Sullivan, Senior Managing Director of Joele
Frank, Wilkinson Brimmer Katcher, +1-212-895-8659, ksullivan@joelefrank.com,
for Bertelsmann AG/New York; or Angus Maitland, Executive Chairman of
Maitland, +44-20 / 73 79 51 51, amaitland@maitland.co.uk, for Bertelsmann
AG/UK; or Lisa Gephardt, +1-212-833-6826, Lisa_gephardt@sonyusa.com, or Mack
Araki, +1-212-833-6821, Mack_araki@sonyusa.com, both of Sony/New York

Web site: http://www.bertelsmann.com/
http://www.sony.net/

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