Toronto - Universal Music Canada is taking a minority stake in Internet broadcaster Iceberg Media.com Inc. under a partnership deal between the two companies.
In Tuesday's transaction, Universal is acquiring 1.7 million units, made up of Iceberg Media.com common shares and purchase warrants.
The pricetag of the deal was not revealed, but it would give Universal a stake of just under seven per cent initially and nearly 14 per cent if the warrants are exercised over a two year period.
As part of the deal, Universal Canada has granted a licence allowing Iceberg to put Universal sound recordings on the Internet.
The strategic relationship between Iceberg and Universal also calls for the development of online music initiatives in Canada, including Internet radio channels for Universal's Canadian music site www.umusic.ca. As well, Iceberg will get access and webcasting rights to Universal's artists and music. Universal has also agreed to establish a marketing fund to be used to promote Iceberg's audio channels.
"This investment is key to maintaining a New Media leadership position within the Canadian music industry," Randy Lennox, president of Universal Music Canada, said in a release.
"Iceberg is an innovative new company which is a market leader in the Internet distribution of music content in Canada."
Ted Boyd, chief executive of Iceberg Media.com Inc., said the deal "is the largest ever investment in an Internet broadcaster by a Canadian record label."
"Forming this strategic relationship with Universal is an important first step in Iceberg's continued commitment to developing strong relationships with Canadian record labels."
Universal Music Canada is a unit of Universal Music Group, the world's biggest recording company with labels that include Decca Record Co., Deutsche Grammophon, MCA Records, Mercury Records, Motown Records, Philips, Polydor and Verve Music Universal Music Group is a unit of Vivendi Universal, a global media and communications company whose major shareholder is Canada's Bronfman family.
In trading on the Canadian Venture Exchange Tuesday, Iceberg Media shares opened at 30 cents.
Back to headlines