AOL 'in talks to sell music unit'
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EMI's Norah Jones picks up Grammys for Best Female Pop Vocal Performance and Best Pop Vocal Album at the 45th Annual Grammy Awards on Sunday
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LONDON, England -- AOL Time Warner is in preliminary talks to sell a majority stake in its Warner Music business to Britain's EMI Group, a report said on Monday.
The deal is likely to be valued at $3 billion to $4 billion, the Wall Street Journal said.
The talks could herald a new round of mergers and acquisitions as the industry struggles to combat falling sales, largely due to Internet piracy and CD burning.
AOL Time Warner (AOL), the parent of CNN, may well hand over its music business -- despite such a move being blocked by the European Union some three years ago. AOL CEO Richard Parsons has made it clear he would like to reduce the company's heavy debt load.
EMI (EMI) is keen to take full control of Warner.
Combining EMI and Warner would bring together some of the best known names from rock music history, including EMI's the Beatles and the Eagles from Warner. EMI's current stable include Robbie Williams, Kylie Minogue, Coldplay and Radiohead.
Bring together EMI and Warner would create a company with about 22 percent of the U.S. market for recent releases well below Vivendi Universal's Universal Music business, WSJ said.
Sources close to both companies told Reuters last month that EMI had been holding "informal talks" with Warner Music. Sources have said EMI has also been in talks with its other rival BMG, owned by German media group Bertelsmann, which it also previously tried and failed to merge with.
In EMI's last round of merger attempts with Warner and then BMG, European regulators made clear they would not accept the world's five biggest media companies shrinking to four. But given the recent slump in the music industry, some believe regulators may be more accepting of a merger now.
