NEWS ANALYSIS: No Time In U.S. for EMI Deal
- By David Lawsky
- Jan. 26 2000 00:00
WASHINGTON -- Some antitrust experts are troubled by Time Warner Inc.'s proposed $20 billion joint venture with EMI Group PLC, fearing it will clear antitrust review without getting a close look.
Antitrust lawyers say the deal might clear without close scrutiny in the United States, but they hope the Europeans will take a closer look.
The problem, they say, is American antitrust authorities may be overwhelmed by mergers. The new, combined Warner EMI Music would bring together the British and American firms in a 50-50 joint venture - managed in the United States - that would control 20 percent of the world's recorded music market with annual sales of $8 billion. Time-Warner is, in turn, being acquired by America Online Inc., pending an antitrust review.
Several antitrust lawyers said that, in the past, such mergers would never have cleared muster.
But times have changed.
"Based on the fact that there was no second request on the Seagram's-PolyGram deal, I'd have to think this would go through," said Keith Shugarman, a lawyer with Goodwin, Procter & Hoar.
Universal Music Group, a unit of Canada's Seagram Co Ltd. holds the largest global market share for recorded music since acquiring PolyGram in 1998.
A "second request" means a close look at a merger. But there was none, meaning that U.S. antitrust agencies permitted the PolyGram acquisition to sail through without question.
Antitrust experts said it was likely U.S. antitrust agencies would give a green light to the EMI-Time Warner joint venture. They said the venture would help the companies make the transition to distributing music over the Internet, rather than on disks.
One lawyer, who asked not to be identified, wondered if the European Union might not want to look closely at the deal, given there would then be only four big companies.
A spokesman for the European Commission suggested it might be prudent to look carefully at a market dominated by a few firms.