Time Warner Serenades EMI
Time Warner Inc. and EMI Group PLC are talking about a $20-billion merger that industry observers say would create the world's largest music consortium, according to various news reports this weekend.
The transoceanic union would see talents the likes of Madonna and Mick Jagger join Time Warner's already impressive roster of artists.
Several news reports indicate that the deal will be publicly announced in London today and would come less than two weeks after New York-based Time Warner agreed to a $160-plus billion merger with America Online Inc.
Time Warner and London-based EMI reportedly confirmed on Sunday that they are near to inking a deal combining their recording units into an entertainment joint venture. Annual sales are reported at $8 billion and the combined value of the entities is pegged at $20 billion.
An EMI statement issued on the weekend said, "The transaction contemplated represents an opportunity to establish the world's premier music group and to create very considerable value for shareholders of both companies."
A Time Warner spokesperson reportedly confirmed EMI's contention.
Early reports indicate the new company would be called Warner EMI and would become the largest music group in the $40 billion global music business, beating-out Montreal-based Seagram Co.'s Universal Music Group.
Time Warner and EMI are presently ranked fourth and fifth respectively on the world music scene. Sony Corp.'s music unit would reportedly slip to third place.
The marriage would see Time Warner's artists, like Madonna, Jewel and Cher, share stable space with EMI stars, which include the Beatles, the Rolling Stones, Van Morrison and the Spice Girls. The conglomerate's labels would include Time Warner's Atlantic, Elektra and Warner Brothers and EMI’s Virgin, Priority and Capitol.
The deal would come amid an industry scramble to embrace emerging technology that could soon make hard-copy recordings, such as discs, CDs and tapes, obsolete and would put Time Warner and EMI in a dominant online market position if the proposed Time Warner merger with AOL, with its 20 million subscribers, is approved.
According to early news reports, the deal would see Time Warner in control of the new entity. The New York firm will reportedly pay EMI shareholders about $1 billion, or roughly $1.65 per share. Warner will reportedly have six seats on the new board of directors, while EMI will seat five. Time Warner President Richard Parsons and EMI Group Chairman Eric Nicoli will co-chair the joint venture, Warner Music chairman Roger Ames will become chief executive, and EMI Music leader Ken Berry will be named chief operating officer.
Reported by Newsbytes.com, http://www.newsbytes.com.