LOS ANGELES Universal Music Group said Tuesday it reached a deal to buy DreamWorks Records, the music unit of the entertainment company formed by film and music moguls Steven Spielberg, Jeffrey Katzenberg and David Geffen.
Terms of the deal were not disclosed. The purchase is expected to be completed early next year, subject to regulatory approval.
Universal plans to fold DreamWorks Records into its Interscope Geffen A&M label, which is run by veteran music executive Jimmy Iovine, sources said.
DreamWorks Records launched in 1996 and is home to a number of established rock and country acts, such as Nelly Furtado, Papa Roach, Toby Keith and the late Elliott Smith. The label also has put out soundtracks to several musicals and films, including "Shrek," "Almost Famous" and "Rent."
"Despite the challenges of the music business today, Universal is acquiring a wonderful asset and the sale will assure the strongest possible future for our artists," Mo Ostin, head of DreamWorks Records, said in a statement.
The deal could help Universal, the music industry's global market leader, retain its position atop the U.S. music market if a proposed merger between Sony Corp. and Berteslmann AG is finalized.
Universal has a 27.8 percent share of U.S. sales, according to Nielsen SoundScan. A combined Sony BMG is projected to nudge Universal into second place.
Universal Music Group is part of Vivendi Universal, a French media and telecommunications conglomerate.