German media concern Bertelsmann is pulling out of its music joint venture with Sony, both companies announced on Tuesday.

A statement said Sony had agreed to acquire Bertelsmann's 50-per- cent stake in New York-based Sony BMG, the world's second biggest music concern launched in August 2004.

The new company will be known as Sony Music Entertainment Inc and will become a wholly-owned subsidiary of Sony Corporation of America.

"After a careful and thorough review, we made the strategic decision to sell our investment in this joint venture to Sony, a step that we believe will benefit the stakeholders of both our companies," said Bertelsmann chairman Hartmut Ostrowski.

"This move is consistent with our new growth strategy and will enable us to focus on our defined growth areas," Ostrowski said.

Ostowski, who took over as chairman in December 2007, said then that the music sector would be reviewed because of its weak growth.

Sony said the acquisition would allow it to achieve "a deeper and more robust integration between the wide-ranging global assets of the music company and Sony's products."

"It enables us to offer a total entertainment experience to consumers," said Sir Howard Stringer, Sony chairman and chief executive officer.

The music industry has been undergoing major restructuring, highlighted by a massive falloff in sales of CDs and DVDs that has only partially been offset by the sale of music via the internet.

Regulatory authorities still have to approve parts of the arrangement, which will see the new company retain a stable of recording artists, including Celine Dion, Alicia Keys and Justin Timberlake.

Sony, the world's leading electronics and entertainment company, recorded consolidated annual sales of 88 billion dollars for the fiscal year that ended in March.

Bertelsmann's media empire includes the RTL television network, book publisher Random House and magazine publisher Gruner und Jahr.