Sony was granted full custody of the music company behind Elvis Presley and Simon Cowell yesterday in an acrimonious buyout settlement that ended its troubled four-year joint venture with Bertelsmann.

The warring parties could not even agree on the valuation of Sony BMG, the world’s second-largest music company, with Sony indicating that the business was worth $1.8 billion (£920 million) and Bertelsmann preferring a figure of $2.4 billion.

The final dispute underlines years of rancour, during which Sony BMG has surrendered market share, but it leaves Sony with the opportunity to take on Apple by integrating the music major with its other electronics businesses.

Sony also gains leverage over Simon Cowell’s output, because it owns half of Syco, Mr Cowell’s business, and has the rights to Britain’s Got Talent and The X Factor. Both programmes are made by a Bertelsmann subsidiary for ITV but Sony hopes that future Cowell formats will be made by its television unit.

Bertelsmann is walking out of the door with $1.2 billion for its half-share, comprising $600 million of cash on Sony BMG’s balance sheet and $600 million directly from Sony.

Taking $1.2 billion for half would value the labels behind Britney Spears and Oasis at $2.4 billion, but Sony harbours feelings that Bertelsmann is double-counting. It indicated that the German media giant, which also owns Five and Random House, the publisher, was already entitled to half – $300 million – of the cash sitting on Sony BMG’s balance sheet.

Sony is paying $600 million direct and handing over $300 million of cash on the Sony balance sheet that it was entitled to, valuing half the record business at $900 million, and the whole at $1.8 billion.

Sony and Bertelsmann united their recorded music operations in August 2004. The joint venture suffered a heavy loss of market share – its unit sales are down 35 per cent in the United States – and the partners quarrelled, leading to the departure of Andy Lack as chief executive. He was replaced by Rolf Schmidt-Holz.

Mr Schmidt-Holz will remain as chief executive of the company, to be renamed Sony Music Entertainment. However, it is not clear that he will survive beyond next year amid speculation that there will be a greater role for Rob Stringer, the brother of Sony’s chief executive Sir Howard Stringer.

It is the first music deal since Guy Hands bought EMI for £3.2 billion, although it appears to have been struck at a valuation well below that acquisition. By Sony’s reckoning, the Japanese electronics giant paid 4.7 times underlying profits to buy out its partner, far below the 18.6 times that Mr Hands had to stump up to swallow EMI last year.

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