EMI, Warner Music renew 'pre-nup talks'

If Sony and BMG can wed, why not us?

EMI wants to woo Warner Music Group again with a view to marriage, in the wake of the anticipated merger between Sony Music and Bertelsmann Music Group.

Unnamed sources cited by The Times claim the European Commission's approval of the Sony-BMG deal has given EMI and Warner executives renewed hope that they too will be allowed to come together.

But a Sony-BMG combo reduces the record majors from five to four. It seems less likely that US and European regulators, which expressed anti-trust concerns over the Sony-BMG merger, will let this drop to three.

If the merger goes ahead, Sony-BMG will account for around a quarter of the world music market. Universal controls another quarter, and together the independent labels yield 25 per cent. EMI and Warner will argue they need to come together to make up the remaining quarter share. Both companies would contribute roughly 50:50 to a combine share.

EMI and Warner have been here before. THey pursued merger negotiations in the autumn of 2000, only to see talks collapse after it became clear that the EC would not authorise the deal, at least so far as EMI's music operation went.

Soon afterwards, Bertelsmann began nosing around EMI, but discussions never reached the stage of formal merger negotiations. BMG's overtures to Sony proved more successful, and in November 2003, the pair announced they were to wed - regulators and shareholders permitting. ®

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