[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 27 July 2006, 13:50 GMT 14:50 UK
EMI shelves 1.35bn Warner merger
Coldplay
Coldplay's latest album was 2005's biggest global seller
UK music group EMI has aborted plans to buy its smaller rival Warner Music amid fears the $1.35bn deal would not get regulatory approval.

It follows a European court ruling which overturned a 2004 decision to permit Sony and BMG to merge, creating the world's second-largest music firm.

EMI, whose stable of artists include Coldplay and Robbie Williams, said the tie-up was off "for the time being".

Warner boasts Madonna and Red Hot Chili Peppers among its stars.

EMI has twice made offers to buy Warner in 2006, which in turn launched counter proposals to buy EMI. Both parties rejected all offers.

US-based Warner has also said it will not now be pursuing a take-over.

'Dominant'

The European Court of First Instance ruling on the Song BMG venture has cast doubts on the prospect of further consolidation in the music industry.

It said that the European Commission, which approved the merger in 2004, had failed to sufficiently demonstrate that the deal would not result in the world's top companies having a "collective dominant position" in the market.

Shares in EMI fell 4% on the news that the Warner deal had been shelved, despite the company saying it had the opportunity to grow alone.

"EMI remains confident that the global music industry has excellent long-term prospects driven by the rapidly expanding demand for digital music," it said.

"EMI is enjoying impressive creative momentum and has exciting release schedules for both divisions for the financial year."

The 2004 Sony BMG deal, which excluded Sony's Japanese music business, left the bulk of the global music market in the hands of four businesses - Sony BMG, Universal Music, Warner Music and EMI.


SEE ALSO
EMI settles 'pay-for-play' probe
16 Jun 06 |  Entertainment
Sony BMG deal under new scrutiny
13 Jul 06 |  Business
EMI rejects Warner takeover bid
28 Jun 06 |  Business
Warner Music throws out EMI bid
03 May 06 |  Business
EMI sees download sales jump 150%
20 Apr 06 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific