EMI in last-ditch bid to save Warner Music deal

Click to follow
The Independent Online

Emi Group, the Beatles to Spice Girls music publisher and distributor, and Time Warner yesterday engaged in last-ditch meetings in Brussels in an attempt to salvage their proposed £10bn joint venture.

Emi Group, the Beatles to Spice Girls music publisher and distributor, and Time Warner yesterday engaged in last-ditch meetings in Brussels in an attempt to salvage their proposed £10bn joint venture.

The European Commission, which sources say will block the link-up under its existing terms, confirmed that the companies have offered new concessions this week. Advisors to the Competition commissioner, Mario Monti, have decided to block the joint venture since it would reduce the number of "major" record companies to four and allow the remaining players to dominate the market.

Amelia Torres, a spokeswoman for Mr Monti, said: "The companies have made proposals recently. Monti's [advisors] are examining those and the companies are discussing things with the Commission."

Ms Torres also noted that the deadline for concessions had already passed. "Commitments cannot be accepted later unless they are specifically justified by exceptional circumstances, or if these new commitments totally solve any problems," she added.

It is understood that the Commission has decided to block the deal owing to the dominant market share the joint venture would create in the distribution of recorded music, particularly in Germany. There are also concerns about the high market share the combined group would have in the lucrative music publishing market. To address these issues, it is understood that EMI has proposed to sell Virgin Songs. It and Warner Music have also proposed to sell off several record labels.

People familiar with the state of negotiations in Brussels denied that the deal was in effectdead. "There are indications that that's not the case," said one source. Rival music industry executives were more sceptical.

One executive said: "The whole logic of the deal was to match content with delivery systems. The contradiction now with the concessions is striking."

The Commission must make its final ruling on the Warner EMI Music joint venture by 18 October and on the AOL-Time Warner proposed merger by 24 October. It is expected to announce both decisions at a meeting scheduled for 11 October.

Fears that the deal will unravel sent EMI's stock down 15p to 540p.

Comments