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By Vivien Schweitzer
27 Jul 2006
EMI has abandoned plans to merge with Warner Music, following the July 13 European Court of First Instance ruling overturning an earlier approval of the merger between Sony Music and BMG.
In a statement released today, Warner announced that the the antitrust ruling earlier this month "has created uncertainty regarding a potential combination of Warner Music Group and EMI. WMG will monitor the situation carefully, but until matters become clearer, for instance as a result of the re-review of Sony BMG by the European Commission or through an appeal to the European Court of Justice, WMG does not believe that it would be prudent to pursue a combination of WMG and EMI."
EMI, in statement, said, "the board of EMI has decided not to pursue a combination with Warner Music for the time being. The board will review this position in the light of future developments."
Since May 1, 2006, EMI has made two proposals to acquire Warner Music and Warner Music has made two alternative proposals to acquire EMI. All were rejected, as neither side could agree on a price. According to the Associated Press, the initial offer was $4.2 billion for Warner by EMI.
In the July 13 Sony-BMG ruling, the court decided there was insufficient evidence to prove that a combined Sony-BMG wouldn't potentially develop into a monopoly. A combination of EMI and Warner Music would have controlled about 25 percent of the recorded music market, overtaking Sony BMG and leaving the joint entity second only to Universal, according to AP, using data from the International Federation of the Phonographic Industry.
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