Bertelsmann AG, Gutersloh, Germany, has agreed to acquire the unprofitable music store CDNow, in an all-cash tender offer for $3 per share, or approximately $141 million. This includes money the German media company is extending to CDNow to pay off its existing debt and keep the it going until the sale closes later this year, it was reported.
CDNow, Fort Washington, PA, will become a wholly owned subsidiary of Bertelsmann e-Commerce Group, which was formed earlier this year. CDNow will become 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 music 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.
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