Monday April 30, 1:05 pm Eastern Time
EMI, Bertelsmann deal to be scrapped - report
LOS ANGELES, April 30 (Reuters) - Plans to merge entertainment giants EMI Group and Bertelsmann are expected to be scrapped later today because of European antitrust concerns, the Los Angeles Times reported Monday.
The newspaper quoted people familiar with the talks as saying the two companies would make a final pitch to European Commission regulators before making that announcement.
The combination of privately -controlled Bertelsmann's (quote from Yahoo! UK & Ireland: BTGGga.F) music operations with EMI Group (quote from Yahoo! UK & Ireland: EMI.L) would create the second largest music conglomerate.
European regulators rejected an earlier bid for EMI by AOL Time Warner (NYSE:AOL - news) on the ground that further consolidation in the music industry would hurt consumers.
EMI executives have balked at a proposed sale of the company's Virgin Records division, which sources told the Los Angeles Times would be crucial to getting approval by regulators.
If the latest merger proposal is not carried out, it would be the third time the British entertainment company was left standing alone at the alter.
EMI, ranked fifth among the major entertainment conglomerates in U.S. sales of current albums, has been wooed and then rejected by Seagram Co. and Times Warner, the paper reported.
Analysts have said that they expect to see shares in EMI, home to artists such as Mariah Carey and the Beatles, fall sharply if the merger talks are terminated.
