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Time Warner, EMI to Offer Concessions

September 19, 2000|From Times Wire Services

BRUSSELS — Time Warner Inc. and EMI Group will agree to sell some music publishing and recorded music assets to win European Union approval for a planned merger of their music units, a person familiar with the talks said.

The disposals would be part of a final proposal presented to the European Commission, the EU's executive body, by a midnight deadline tonight. The companies will also promise not to favor America Online Inc., which is buying Time Warner, for distribution of music on the Internet, the source said.

The commission has said it objects to the combination, which would create the world's top music company, because it could dominate recorded music, music publishing and delivery of songs over the Internet. The companies have said they're confident they'll win EU backing for the merger.

In recorded music, EMI-Time Warner would have roughly the same share or even less of the global market than Seagram Co.'s Universal Music Group, analysts have said. EMI and Time Warner's record labels include Atlantic, Virgin and Capitol.

In music publishing, though, they would control a third of the 6 million English-language music copyrights, or about three times more than the next biggest competitor, analysts say.

Separately, the European Commission reportedly is prepared to recommend against AOL's planned $125-billion purchase of Time Warner.

The commission's antitrust regulators have circulated a preliminary recommendation to block the deal, the Wall Street Journal said Monday, citing people familiar with the situation.

The commission's main worries concern domination of the market for the digital delivery of music and the emerging markets for online distribution of sports and entertainment.

Shares of Time Warner rose 44 cents to $81.25 and shares of AOL rose 38 cents to $55.63, both on the New York Stock Exchange.

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