Bertelsmann A.G. to Buy CDnow
BERTELSMANN A.G., Gutersloh, Germany, has agreed to acquire the unprofitable online music retailer CDnow Inc. in an all-cash tender offer for some $141 million. The offer includes funding for CDnow to pay off existing debt and to continue operations until the sale closes later this year. CDnow, Fort Washington, PA, will become a wholly owned subsidiary of Bertelsmann’s e-Commerce Group. It will be Bertelsmann’s “primary engine” for all music commerce across online, mobile and broadband platforms and evolving technologies such as digital downloading and streaming. The subsidiary will work with GetMusic, an online joint venture between Bertelsmann’s BMG Entertainment and Universal Music Group, to feature GetMusic’s content. CDnow will continue to operate under the CDnow brand. The company has lost about $212 million since its launch in 1994.
