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BMG commandant Rolf Schmidt-Holtz has been tapped as Chairman; SME chief Andrew Lack would serve as CEO. The announcement adds that the post-merger staff would "include senior executives from both music groups."

SONY-BMG ANNOUNCE
URGE TO MERGE

Letter of Intent Signed for Another Big
Music Wedding
Sony Music and BMG have signed a non-binding letter of intent announcing their intention to merge.

The new entity, which has been given the adorable moniker Sony BMG, will be 50 percent owned by each music group's parent company, should it pass regulatory muster. What, The Axis was taken?

The joint venture will combine BMG and SME's recorded music businesses. The new company would not include their music publishing, physical distribution or manufacturing businesses.

BMG commandant Rolf Schmidt-Holtz has been tapped as Chairman; SME chief Andrew Lack would serve as CEO. The announcement adds that the post-merger staff would "include senior executives from both music groups."

The Sony BMG Board of Directors would be equally divided between Sony and Bertelsmann execs.

That a firm plan to bring the two music entities together has emerged from recent talks between Lack and Schmidt-Holtz is a stunning turn of events for many biz watchers, who’ve been focused on the planned WMG-EMI coupling.

A conjoined Japanese-German behemoth would not only revive the nostalgic glow of the previous century’s most devastating conflict, but would also handily occupy second place in a new Big Three with roughly 25% marketshare, according to most assessments.

While Sony-BMG makes strategic sense as a maneuver against the slower-cooking Warner-EMI marriage (and the ever-swelling UMG behemoth, now set to gobble DreamWorks Records), the regulatory fate of these pairings with authorities in the U.S. as well as the European Union is anything but certain.

Indeed, as noted in our initial Rumor Mill item, there’s a distinct possibility that both mergers could be struck down by antitrust concerns—leaving figures from outside the label-group universe, such as Edgar Bronfman, Jr., to assemble offers of their own.

Sony Entertainment head Howard Stringer recently confirmed that while the music division was not for sale, it was pursuing merger opportunities. Sony is also said to be working on leveraging its music assets more aggressively in its hardware efforts.

BMG is currently enjoying a fabulous Q4 hot streak, with albums from RCA’s Clay Aiken and The Strokes, Arista’s OutKast and J’s Rod Stewart crowding the upper reaches of the chart, with Britney SpearsSarah McLachlan, Pink and Idol winner Ruben Studdard all coming before the end of the year.

Keep it here for further details. After all, you can’t tell the mergers without a scorecard.
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