The proposed merger between music giants Warner Music and EMI is officially on hold, following a ruling by the European Court of First Instance regarding Sony BMG.
Warner and EMI were well into negotiations to merge when the July 13, 2006 ruling out of Europe changed everything. The European Court of First Instance ruled that the "marriage" between Sony Music and BMG should be "annulled". They merged in 2004.If dissolving the Sony and BMG partnership happens, there is little chance that a Warner / EMI merger would be approved.
Ironically, Sony BMG's current court woes could be a business advantage.
If the company appeals the European Court's decision, the case could go on for years. In that time, the music giant will remain powerful and Warner and EMI will be robbed of potential synergies, making them less competitive overall.
A statement from Warner Music Group today said "WMG does not believe that it would be prudent to pursue a combination of WMG and EMI. Accordingly, WMG does not intend to make an offer for EMI at this time".
