EMI and Time Warner were today reported to be in talks over the creation of a music powerhouse to bring some of the industry’s biggest names under one roof.
The Sunday Times said London-based EMI had offered $1.5bn (€1.3bn) for Time Warner’s music business in a tie-up that would create the world’s second largest music group behind Universal.
Among star names at EMI are Robbie Williams, Norah Jones and Kylie Minogue, while Warner Music Group has Madonna, Red Hot Chilli Peppers, Craig David and Missy Elliott.
The move follows the ending of an exclusivity agreement on talks between US-based Time Warner and Germany’s Bertelsmann over the creation of a 50:50 joint venture.
EMI was unavailable to comment on today’s report, which also said there were hopes of a deal being completed by the end of next month.
The combination would create a company with a 2002 global market share of 23.9%, compared with 25.9% by Universal.
Shares in EMI have almost doubled since hitting a low point of 80p earlier this year. However, the stock is still way below its value of 390p in 2002 as the impact of Internet piracy continues to hit the music business.
A similar tie-up between EMI and Time Warner fell foul of regulators in 2000 but today’s report speculated that the escalation of piracy and slump in music company profits could lead to a different outcome this time.
EMI is likely to raise the one billion US dollars in cash for the deal from bankers rather than through a rights issue. It also plans to offer Time Warner music executives senior positions in the new company.