///Corporate

UNIVERSAL MUSIC ACQUIRES ARSENAL MUSIC, BRAZIL’S MOST IMPORTANT INDEPENDENT LABEL

SÃO PAULO, BRAZIL, September 28, 2006 – Universal Music Group, the world’s leading music company, has agreed to acquire Arsenal Music, Brazil’s new-talent powerhouse, from founder and owner Rick Bonadio. Terms of the deal were not disclosed.

This strategic acquisition for Universal Music Brazil encompasses a strong catalogue and a dynamic artist roster, including CPM 22, IRA!, NXZero, HAteen, and Planta & Raiz. Although it is an eclectic label, São Paulo-based Arsenal Music is recognized as the primary source of new artist development in the Brazilian pop/rock scene. It complements a domestic-artist roster at Universal Music Brazil that is considered to be the industry’s best.

The agreement establishes for Universal Music a stronger presence in Brazil’s largest market, São Paulo. Rick Bonadio and his Arsenal Music team – including their A&R and marketing functions – will continue to be headquartered in the city, operating separately as part of Universal Music Brazil.

José Antonio Eboli, President of Universal Music Brazil, said: “Rick Bonadio is one of the most important producers of music’s new generation. His work during the past five years has been remarkable in this country’s artistic scene, especially in the pop/rock segment. Bringing Rick’s label, and all the members of his team, into the Universal Music family not only makes me very happy, but also it shows the commitment of our parent Universal Music Group – always investing in Brazil.”

Rick Bonadio commented: "All of us at Arsenal Music know that Universal Music Brazil’s commitment to new artists is an example to be followed. Together, we believe in Brazilian talent, and we know that great music will rise above any difficulties in the market. This new structure and partnership enables us to take Arsenal Music to even greater heights in the future.”

Jesus Lopez, Chairman/CEO, Universal Music Latin America & Iberian Peninsula, added, “Rick Bonadio, together with his team and his artists, are the perfect complement for our company in Brazil. The strength of our market-leading roster, coupled with Arsenal Music’s innovation, guarantees that we will capture the spirit of the new century in Brazilian music, and help to bring it to its full potential.”

Pascal Negre, President, Mediterranean, South America and Middle East Regions, for Universal Music Group International, commented, “Brazil is a vital source of repertoire for the world, and the country’s artists and music reflect a multicultural outlook that is important to our company. We’re delighted to welcome Rick and Arsenal Music into the Universal Music family.”

Max Hole
Executive VP, Marketing and A&R, UMGI

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