EMI courts Warner as music companies struggle to survive

September 24, 2003

If we are to believe the news,
the music industry is in trouble. Currently there are five major companies
running the show; Universal, Sony, EMI, Warner and BMG. However, piracy and slow
sales are driving consolidation of these five music companies into
just two or three players.

GristyMcFisty
reports us that in the latest round of the music industry's ongoing
struggle to survive, the London-based EMI Group wants to take over AOL Time Warner's Warner Music Group with an
estimated $ 1.5 billion takeover offer:

The deal would create the world's second-largest music
company, which would have a 24% market share and artists ranging from
newer talents such as Norah Jones and Coldplay to icons such as the
Rolling Stones and Madonna.

"Discussions are at a very preliminary stage, and there is no
assurance that they will result in an agreement acceptable to both
parties," said a company statement. AOL Time Warner, which is in the
process of dropping the AOL from its corporate name, declined to
comment.

EMI's preliminary offer is slightly less than $ 1 billion in cash
and about $ 600 million in EMI shares for control of Warner Music, say the
sources close to the talks. Time Warner would hold a 25% stake in the
beefed-up music company and several seats on the EMI board.

EMI confirmed Monday that it was in "non-exclusive" discussions to
buy Warner Music.

According to the article it's not the first time that EMI wants to take over
Warner. In 2000 they attempted a merger but it failed due to European
regulators. EMI then tried a deal with BMG, and that also was squashed due to
regulatory concerns.

Source: Yahoo! News