NEW YORK (CNNfn) - Seagram Co. Ltd. completed its $10.2 billion acquisition of PolyGram Thursday, creating the world's largest music group and warning of "redundancies."
Liquor giant Seagram (VO ) said Universal Music, formed after the PolyGram (PLG ) purchase, will include Island Records and Mercury Records. The group will boast the likes of such performers as Elton John, Herbie Hancock and U2.
The restructuring is expected to result in the loss of about 3,000 jobs, or 20 percent of PolyGram's and Universal's work force of 15,500. Company officials wouldn't comment on any staff reductions.
The job cuts and the closing of some record labels will help save $300 million in annual costs for the combined company, Seagram said.
On the movie side, Ron Meyer, president and chief operating officer of Universal Studio, said the company will integrate PolyGram Film Entertainment into Universal's film business.
Meyer said Universal had explored the possibility of selling PFE.
"Although there are redundancies and certain assets may be more valuable to third parties," Meyer said, "we believe that a substantial portion of PFE is complementary to Universal's filmed entertainment operations and globalization strategy."
PolyGram film's operations include PolyGram Films, PolyGram Television, Propaganda Films and Working Title Films.
Seagram has taken some nasty hits recently with such box office turkeys as "Meet Joe Black" with Brad Pitt and the "Babe" sequel. Two top film executives also bit the dust in the turmoil.
Seagram was down 2 at 34-3/4 in early afternoon trading.