Established in 1972 as a reorganised holding corporation for Philips and Siemens subsidiaries that had been under the joint Grammophon-Philips Group (GPG) umbrella since 1962, including Verve Records, RSO, Mercury Records, Deutsche Grammophon and Philips Phonographische Industries (PPI). Subsequent acquisitions included Casablanca Records (1977) and Decca UK (1980).

By the early 1980s, PolyGram was making losses and forced a major reorganisation, but by 1985 was once again profitable. After an attempted 1983 merger with Warner Music failed, Siemens' stake in the company was bought out by Philips in 1987.

At the end of the 1980s, PolyGram embarked on a new acquisition programme which included Island Records (1989), A&M Records (1990), Motown Records (1993) and part of Def Jam Recordings (1994).

In 1998, Philips sold PolyGram to Seagram, which already owned MCA Records and its subsidiaries. Seagram combined PolyGram and MCA into Universal Music Group, which became the largest music company and distributor in the world.