EMI, Time Warner plan to form global music firm

Details of the deal are due to be announced on Monday morning. Time Warner announced its own merger with Internet giant America Online two weeks ago, with AOL agreeing to buy it in a stock swap worth 163 billion. Leveraging off that new media titan will give the merged EMI-Warner unprecedented access to Internet-based distribution channels for its music. EMI-Warner will bring together some of the biggest names in music. EMI8217;s line-up includes the Beatles, the Rolling Stones and the Spice Girls while Warner8217;s stars include Eric Clapton, Cher and Madonna.

An EMI spokesman declined to comment on themerger talks, following earlier reports by British newspapers The Sunday Telegraph and Sunday Business that a deal was close. The papers said EMI chairman Eric Nicoli and senior directors were meeting their opposite numbers from Warner, including Roger Ames, head of Warner Music Group, at the London offices of Warburg Dillon Read on Sunday morning to finalise terms. Warburg is advising EMI while Morgan Stanley Dean Witter is thought to be representing Warner.

The deal will create a business with sales of more than 8 billion a year and bring together a number of well-known record labels including Virgin, Atlantic, WEA and HMV. Carlo Campomagnani, media analyst with Credit Suisse First Bosto, said both sides stood to gain from the tie-up and the increased exposure to Internet consumers.