Vivendi's Universal Music has agreed to buy BMG Music Publishing for 1.63 billion euros (1.1 billion pounds) in a long-expected deal that makes the world's biggest seller of recorded music also the largest in music publishing.

German media conglomerate Bertelsmann AG, BMG Music Publishing's parent company, also said on Wednesday it was settling litigation related to file-sharing service Napster that will see Vivendi receive $60 million (31.7 million pounds).

Vivendi topped offers from six other bidders for BMG Music Publishing, which owns the rights to thousands of songs, including ones by Coldplay, Christina Aguilera and Barry Manilow.

It was seen as a frontrunner in the auction from the time it was tipped Bertelsmann would sell BMG earlier this year.

Bertelsmann, which is selling its music publishing arm to help fund the buyback of a stake in the company, said the sale agreement would increase its net income by about 1 billion euros.

The deal faces regulatory review by competition authorities in both the United States and Europe.

Meanwhile, the Napster settlement ends one piece of three-year-old litigation against Bertelsmann, which is being sued by various music publishers and record labels for allegedly contributing to copyright infringements by granting loans to Napster and enabling it to survive longer than it would have without the support.

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