French media group Vivendi Universal has acquired MP3.com, a California-based online music sharing site, for around $372m in a cash and shares deal.
The move expands Vivendi's presence in online music distribution, with the French group apparently confident the sector has a bright future beyond its current consolidation and legal travails.
'MP3.com will be a great asset to Vivendi Universal in meeting our goal of becoming the leading online music service provider,' Vivendi chairman Jean-Marie Messier said in a company statement released in Paris and in San Diego, where MP3 is based.
Vivendi said that MP3.com has developed proprietary-patented technology capable of distributing not only music, but also video and text content over the Internet.
Shareholders holding more than 50% of MP3.com's stock have already voted in favour of the acquisition.
MP3.com takes its name from the technical term for sound files that can be downloaded from the Internet. The company has already experienced similar legal problems to those affecting Napster - the most widely known free music file exchange service.
After the record industry filed lawsuits against Napster complaining of copyright infringement, a US court in March forced the web site to begin filtering out songs that major record labels argue are copyrighted.
A year ago, MP3.com was also sued by the world's five major record companies for copyright infringement in a joint suit with the Recording Industry Association of America. Four of the record companies settled with MP3, but Universal Music refused to negotiate and was awarded damages.
Napster in the meantime in October entered into an alliance with German media giant Bertelsmann. Bertelsmann withdrew from legal action against Napster, announcing instead it planned to introduce a fee based system for the California firm, providing compensation for artists and other copyright holders.
Vivendi said Sunday that MP3.com under its ownership would 'continue to feature content from all record labels and from independent artists.'
