LONDON, 14 JANUARY 1999 — Universal Music UK chairman and CEO John Kennedy today announced that there will be three principal record labels in the newly combined operations of PolyGram and Universal in the UK: Mercury, Polydor and Universal/Island.

Mercury and Polydor were already stand-alone labels at the former PolyGram. PolyGram’s third label, Island, will be merged with Universal Records to create a brand new label called Universal/Island, the staff of which will be housed under one roof in a new location.

Mercury’s size and repertoire will remain largely unchanged. It will continue to market repertoire from the New York-based labels Mercury and Def Jam but it will also assume responsibility for the UK marketing of Island US’s repertoire.

After a very successful year, Polydor will see its supply of US repertoire strengthened as it takes on the UK marketing of repertoire from Los Angeles-based labels Interscope, Geffen and DreamWorks. Polydor already handles repertoire from A&M in America.

Universal/Island will be responsible the for the combined labels’ artist rosters as well as handling marketing for US labels MCA, Universal and Motown (Motown was previously handled by Polydor in the UK).

Kennedy commented: “Happily this is a very straightforward plan which is designed to build on the strengths of our UK labels and complement the US structure of the new company. We can now move forward with staff consultation, with a view to completing all aspects of the integration by early February – it is to the credit of everyone and their continued commitment that we ended 1998 with an impressive four albums in the UK Top 10.”