Len Blavatnik poised to pay $1.5bn for the last major British record label, home to the Beatles and Coldplay

EMI, the record label that signed the Beatles, Pink Floyd and Coldplay, is likely to be broken up this week and sold to a Russian-born billionaire.

The sale will mark the end of an era for UK music. EMI is the last major domestic music label and its record of signing homegrown talent has made it the unofficial home of British pop.

EMI's other acts include Kylie Minogue, Kate Bush and Tinie Tempah. It is now owned by American bank Citigroup, which took control of the label when its private equity owner Terra Firma failed to repay the loans it took out to buy EMI in August 2007.

Citigroup has been in talks to sell EMI's recording arm and its music publishing division since last year, but at the end of the week Universal, one of the main potential buyers, pulled out of the bidding process, leaving the wealthy businessman Len Blavatnik in pole position to buy the bulk of the business.

Blavatnik is the New York-based founder and owner of Access Industries, the international chemicals conglomerate that bought EMI's rival Warner Music for £2bn in May this year.

He is expected to pay around $1.5bn for EMI's recorded music division, according to industry sources. Its publishing arm, which owns the rights to a catalogue of more than a million songs by artists including Kanye West, Arctic Monkeys and Jay-Z, is likely to be sold to the German media group Bertelsmann and KKR, an American private equity company.

The deal will create a third major global music label to rival Universal and Sony, which have emerged as the dominant forces in global music following a string of deals in the industry over the past decade.

It is also likely to mean the end of the EMI brand in America, where the label is expected to be phased out, although the name will be retained in European markets.

The final details of the sale are still being hammered out, but music industry sources say official confirmation is likely to come at the end of the week.

Senior industry figures are already bemoaning the fact that a national industry champion is set to fall into foreign hands. Jazz Summers, a rock music veteran who was manager of British indie band the Verve, said: "It's a tradition that I'll be sad to see end. It will be a stronger record company [after the sale] but it will also throw a lot of people out on the street." The new owner is expected to trim the combined group's workforce after the sale is complete, and hundreds of jobs are expected to go as a result.

EMI's sale follows the disposal of other quintessentially British companies, including Rover and Cadbury, to overseas brands. Cadbury was bought by the American food giant Kraft in 2009.

But Sir Martin Sorrell, who chairs British-based WPP, one of the world's most powerful advertising and marketing companies, said that it would be wrong to feel sentimental about EMI falling into foreign hands.

"I think it was probably inevitable, given what happened with Terra Firma and given consolidation due to [the shift to] online content. It was inevitable that the established brands would have to consolidate", Sorrell said.

He added: "We do work in a global economy, we don't operate in a vacuum. Plenty of [UK] companies have benefited from overseas expansion and have done well overseas. It is more to do with global business and not a great British brand disappearing. The pressure has been there since Napster and the impact of online on the music business."

The digital revolution and the advent of iTunes and the iPod transformed the economics of the music industry and has forced major labels to seek merger deals.

Terra Firma, which was founded by the millionaire buyout specialist Guy Hands, embarked on a cost-cutting exercise after it acquired EMI four years ago, in an attempt to reduce debts of around £2bn.

Hands cut up to £100m a year in spending on items including "fruit and flowers" (widely believed to be a euphemism for drugs). The company's £700,000-a-year London taxi bill was slashed, and some 2,000 jobs went in his first year.

That exercise is now likely to be repeated by EMI's new owners, with further redundancies of around 10% expected at its global workforce of around 3,500.