Musical merger

14 January 2003

For now, speculation about an EMI merger does not have much substance. But the global music business is definitely ripe for consolidation. The barrier to a Bertelsmann/EMI deal is that the German group has no cash. That is almost soluble but not quite.

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Bertelsmann Music Group and EMI are reported by the New York Post to be in renewed merger talks. The two flirted with merger in 2001, but cancelled the talks because they expected the European Commission to bar a merger on competition grounds. The Bertelsmann group's chief executive, Guenther Thielen, said in October that BMG's structure was not in its final form. In November 2002, BMG finalised its acquisition of 100% US music company Zomba, following the exercise of a put option.

Neither Bertelsmann or EMI is commenting on the merger rumour.

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