Vivendi's Universal Music unit is closing in on a deal to buy EMI's recorded music business and is expected to announce it imminently, a source familiar with the situation said on Friday.

The Financial Times earlier said Universal, the world's largest music company, would pay owner Citigroup $1.9 billion for the unit of debt-laden British music label EMI, citing sources familiar with the matter.

Vivendi declined to comment, while Citigroup was not available to comment.

Universal returned to the auction this week after pulling out in a dispute with Citigroup over EMI's pension liabilities, sources told Reuters this earlier this week.

Billionaire Len Blavatnik, the owner of Warner Music Group, had been seen as the frontrunner but walked away last week after Citigroup turned down his offer of about $1.5 billion, two people familiar with the talks said.

(Reporting by Kate Holton in London and Elena Berton and Gwenaelle Barzic in Paris; Editing by Will Waterman)