According to Veckans Affärer, EMI and Bertelsman (BMG) are considering a merger. Once again, EMI will be the biggest record company in the world if the merger happens (or at least become part of the biggest company). The EU might not approve though, as they did not look kindly on the plan for EMI to merge with their previous suiter, Warner Music Group (WMG).

  BMG Entertainment is one of the world’s premier entertainment companies. It is home to more than 200 record labels in 54 countries, the world’s largest music club, a highly regarded distribution company, and a music publishing company. BMG is a leader in marketing and selling artists’ music over the Internet as well as one of the world’s largest compact disc manufacturing companies.

  Meanwhile, EMI is said to still be in talks with Warner Music Group (WMG).


  According to an EMI statement, “the transaction proposed by Bertelsmann does not involve an offer being made for EMI.” Speculation is that a deal would most likely be a combination of the companies’ businesses, not a takeover bid by Bertelsmann. One scenario could see BMG’s privately held business brought onto the London Stock Exchange through a merger with EMI.


  EMI’s announcement came under pressure from the stock exchange, which sought explanation for the intense market speculation that has caused the company’s share price to soar recently.


  EMI and WMG withdrew a proposed merger plan last month when it appeared that the deal would be rejected by the European Commission. WMG chairman/CEO Roger Ames and EMI president/CEO Ken Berry reportedly met Thursday in New York; the nature of the meeting is not known. Warner and EMI are currently bound to a contract — to expire Jan. 31, 2001 — stipulating that neither can solicit a bid but that they can hold discussions with others.


  A deal between EMI and BMG would require anti-trust clearance in the U.S. and Europe. EC competition authorities have expressed that they would be more sympathetic to a deal to bring together two European companies than they were to the failed proposal by EMI and US-based Warner.


  Bertelsmann has been in the news as of late because of its “strategic alliance” with controversial file-swapping software company Napster. Details of the agreement – in which the company’s E-commerce division, BeCG, will provide Napster with a loan to develop a membership-based model, and its BMG music division will drop its copyright infringement lawsuit against the company – were met with cautious optimism from others in the music industry.


  The $4.7 billion music and entertainment division of Bertelsmann AG is headquartered in New York City’s Times Square. They have revenues of $17.6 billion and their labels include Arista Records, RCA Music Group and Ariola, among many others. BMG has significant online activities, including a joint venture partnership in GetMusic, which promotes artists and sells their music over the Internet.
  BMG’s worldwide superstars include Whitney Houston, Annie Lennox, Barry White, Christina Aguilera, Eros Ramazzotti, George Winston, Natalie Imbruglia, Puff Daddy, Santana, Sarah McLachlan, Kenny G, TLC, Dave Matthews Band and Toni Braxton.