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News > Deals
EMI offers remedies to EU
September 19, 2000: 7:30 a.m. ET

UK music publisher airs changes to Warner deal as deadline nears
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LONDON (CNNfn) - EMI Group PLC said Tuesday it had proposed a "balanced set of remedies" to European Union antitrust officials as the U.K. music publisher worked to persuade the EU to approve its planned joint venture with Warner Music Group, the music arm of Time Warner Inc.

The companies are nearing a deadline of midnight Tuesday to propose changes in the planned venture to the European Commission, the executive arm of the European Union. The antitrust body, led by Mario Monti, typically entertains proposed changes to merger submissions no later than a month before it wraps up its competition review.

A final decision on EMI-Time Warner is expected Oct. 18. graphic

"Together with Time Warner, (EMI) has held discussions with the commission, following which the two companies have proposed a balanced set of remedies intended comprehensively to address the issues raised by the commission in respect of the proposed combination," EMI said.

The EMI-Time Warner alliance, billed as a joint venture that would pool the companies' music interests under the name Warner EMI Music, would boast nearly 2,500 artists and a release schedule of 2,000 albums per year.

EMI's stable of labels includes Capitol Records, EMI and Virgin, with big-name artists such as Sting, the Spice Girls, Lenny Kravitz and Garth Brooks. Warner Music is behind the Atlantic, Elektra and Warner Brothers labels and counts R.E.M., Faith Hill, Cher, Phil Collins and Metallica among its hitmakers.

The concessions would include the sale of some record labels in Spain, France and Denmark along with music publishing interests, said Reuters Tuesday, echoing other media reports last week.

Yielding ground


They also agreed to respect prices set for copyrights by national collecting societies, restructure their distribution businesses, pull out of compact disk manufacturing, and change their arrangements for producing compilation albums, the news agency said.

EU officials, who have telegraphed their willingness to block the deal unless they receive broad concessions, are concerned the deal will hurt competition by reducing the number of global music publishers from five to four. EMI and Warner currently compete alongside Universal Music, a unit of Canada's Seagram Co. (VO: Research, Estimates), Germany's privately owned Bertelsmann Music Group and Japan's Sony Music as the world's five leading music companies.

Complicating matters for the venture is the planned merger of Internet service provider America Online Inc. (AOL: Research, Estimates) and Time Warner (TWX: Research, Estimates), which EC officials fear could create a dominant distributor of music via the Internet if Time Warner brings EMI (EMI) into its fold. graphic

Reports said Tuesday that EC officials have circulated a draft decision calling for the EU to block AOL's union with Time Warner.

Amelia Torres, a spokesperson for Monti, said she did not know what the EC's specific concerns were, but said she believed they were similar to those the commission first aired in June about market concentration and the new venture's potential domination of Web-based music distribution. Monti had cited a promotion, distribution and marketing alliance between Germany's Bertelsmann Music Group and America Online.

Shares of EMI rose 3.6 percent to 576 pence Tuesday morning in London. Time Warner, which is the parent company of CNN and CNNfn.com, dropped $0.44 to $80.81 in early trading on the New York Stock Exchange. Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.