WEMI STILL HOPING FOR EC APPROVAL

Time Warner's Warner Music Group and EMI on Friday (9/29) were still in talks with European regulators, attempting to save their planned merger.

The European Commission confirmed it had received new concessions from the companies in the last few days. As first reported here (hitsdailydouble.com 9/27), TW's head of music Richard Parsons, WMG chief Roger Ames and EMI topper Ken Berry returned to Brussels to float the idea of selling off Virgin Records and the Chappell part of music publisher Warner/Chappell to secure regulatory approval of the deal. At this late stage in the EC review, it is unknown if such concessions would solve the remaining competition concerns.

Sources said Warner/Chappell honcho Les Bider accompanied Ames to Brussels to help explain how the company planned to divest some of its publishing operations. Bider had been integral in engineering the merger of music publishers Warner and Chappell 12 years ago.

The sale of Chappell and Virgin Records was added to previous concessions offered that called for the sale of Virgin Songs as well as labels in three European countries. The companies also proposed closing CD manufacturing plants in Europe and addressed concerns about the future implementation of online music distribution.

On Thursday, EU sources said the commission was planning to block the WEMI joint venture on the grounds that it would reduce the number of "major'' record labels to four from five and allow the remaining players to collectively dominate the market.

The sources said the commission, however, had proposed to clear the linked $135 billion merger of America Online and Time Warner.

Spokeswoman Amelia Torres said it was premature to talk of a final ruling on either case, as a formal decision still had to be taken by the full 20-member Commission. But she did confirm that contacts were still going on.

"The companies have made proposals recently. [EU Competition Commissioner Mario] Monti and his committee are examining those and the companies are discussing things with the commission,'' Torres said. "The deadline for concessions has passed. Commitments cannot be accepted later unless they are specifically justified by exceptional circumstances, or if these new commitments totally solve any problems which might exist."

The commission will make a decision by Oct. 18 for WMG's merger with EMI and by Oct. 24 for AOL's purchase of TW.