EMI puts merger on hold.

Plan for tie-up with Warner shelved

by Ben Cardew

EMI is putting a brave face on the decision to temporarily shelve its Warner bid, despite fears that holding off any liaison attempt could prove harmful for the entire music industry.

The major announced last Thursday that it had decided not to pursue a combination with Warner Music Group, following the European Court Of First Instance's decision to annul the EC's approval of the Sony BMG merger. Warner then responded in kind, ruling out an offer for EMI "at this time".

EMI emphasised that this decision would hold "for the time being" and that the company's board would review this position in light of future developments.

"Our position from the beginning was we would not propose a deal to shareholders if we thought we would not get approval, recognising there's never any certainty," says EMI Group chairman Eric Nicoli. "I would have to be confident enough without it ever being certain."

EMI's move was naturally welcomed by European indie organisation Impala which, having seen the EC's Sony BMG merger decision overturned, says it confirms its views that "further concentration in the music business is against the interests of the business overall, music makers and music fans".