Sony is buying EMI Music Publishing, getting its hands on a catalogue of 2.1m songs from Beyonce, Carole King and other artists as it embarks on a new growth plan built on content and services.

The Japanese company will buy about 60% equity interest from a consortium led by from Mubadala Investment for about US$2bn, Sony said in a statement. The Tokyo-based company already owns almost 40% of EMI, operates the business and had been in talks to buy the library for the past few months.

EMI’s extensive catalogue will solidify Sony’s position as the largest music publisher amid a boom in streaming services that has fuelled valuations for music copyrights. The transaction is the first major strategic move by Kenichiro Yoshida, who took over as CEO in April. He also unveiled a three-year plan Tuesday that embraces Sony’s growing reliance on income from gaming subscriptions and entertainment.

“We are thrilled to bring EMI Music Publishing into the Sony family and maintain our number one position in the music publishing industry,” Yoshida said in the statement.

Sony is paying $1.9bn for the 60% equity stake from the consortium. With the cost of warrants for stock and management incentives, the price is $2.3bn, a spokesman for the company said.

“This is certainly on the high side of what we previously expected,” said David Dai, an analyst at Sanford C Bernstein & Co in Hong Kong. “It is a high price to pay for the strategy to shift from hardware to content.”

In its midyear plan, Sony predicted profit growth across most divisions over the next three years, but provided a mostly conservative outlook that weighed on shares. For example, annual operating profit in the game and networks is projected to be 130bn to 170bn yen by March 2021, compared with the outlook for 190bn yen in the current year. Sony shares fell as much as 3.7%, the biggest intraday decline since 1 May following the earnings announcement.

Enterprise value

Mubadala said the EMI deal is based on an enterprise value of $4.75bn, exceeding its target of getting at least $4bn. That’s double what the Sony-led group, which also includes billionaire David Geffen, paid for the business six years ago. That makes the sale the largest music industry transaction since the last time EMI changed hands.

Music publishing has long offered owners a steady source of cash, in contrast with the more cyclical recorded music business, which is dependent on hits and retail sales and has historically gone up and down depending on the success of new releases in a given quarter.

Growing paid streaming services from Spotify and Apple have boosted music industry sales for three years in a row and enticed investors to splurge on catalogues. Labels own the recordings of songs, while publishers own the songs as originally written.