Warner Music Makes Another Play For EMI
EMI stated publicly that it has received a buyout bid from Warner Music, the latest play in a seven-year saga in which the two music groups have tried to buy each other. EMI, the world’s third-largest label, said it had not received an actual proposal from Warner, but has had discussions with its biggest rival. Even after two consecutive profit warnings, an EMI/Warner merger would still need to address the same regulatory problems that disemboweled previous attempts.
EMI and Warner Music first tried to merge in 2000, and then again in 2003. Last year, they were locked in a $4.6 billion battle to buy each other, but hopes of a deal were put in peril when a European court annulled approval of the 2004 merger of Sony Music and Bertelsmann’s BMG in June. That ruling cast doubt on whether EMI and Warner Music would get regulatory clearance, and the companies abandoned talks until there was more clarity from antitrust regulators. However, now that EMI is in dire straits, regulators could be more forgiving.