Summary:

If this latest effort to merge Warner Music Group and EMI goes through, the combined companies model could well be “never say never.” So wha…

If this latest effort to merge Warner Music Group and EMI goes through, the combined companies model could well be “never say never.” So what changed between last summer’s shutdown after a European court ruling lessened chances of approval? This time when WMG approached EMI it had a potentially valuable asset beyond cash or stock — an agreement from the Independent Music Publishers and Labels Association (Impala) pledging full support of a WMG acquisition of EMI before the European Commission and other regulatory bodies. According to a statement released by WMG Tuesday after EMI went public, that agreement covers guarantees by WMG:
– funding for Merlin, the indie global rights licensing platform announced last month at Midem,
– divestiture of some recorded music assets
– the rather nebulous promise to purse “various other behavioral commitments” that would help the indie sector and the”recorded music market as a whole.”
– IMPALA keeps its standing in other cases, maintaining “its position that the Sony/BMG and Universal/BMG transactions continue to raise competition issues unless suitable remedies are offered.”
WSJ (sub. req.): “While it would be up to the European Commission to rule whether an EMI-Warner merger is anticompetitive, Impala’s support makes approval more likely. U.S. antitrust authorities aren’t expected to object because EMI doesn’t have a strong position in the U.S.” As the Journal notes, the executive changes at EMI could help — the departures of Alain Levy and David Munns lessens potential rivalries. Also, I’d add, the appointment of John Gildersleeve as non-executive chairman and the shift of Sir Eric Nicoli to operations gives Bronfman someone new to deal with at the negotiating table.

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