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EUROPEAN COMMISSION SET TO RESTART SONY-BMG REVIEW
Information Due Wednesday; Report Sees Likely Approval
According to a report in London’s Financial Times, the European Commission is likely to formally state its objections to the proposed 50-50 joint-venture merger of Sony Music and BMG this month. While the EC’s objections are expected to result in some minor concessions from the two parties, the EC is still widely expected to approve the deal by the end of July, the paper says.

The Commission’s list of objections will likely be sent out in mid-May, after it has had time to go over additional information it requested from the companies, said to be due in Brussels on Wednesday. The EC halted the clock on its formal inquiry of Sony-BMG on April 13 in order to allow time to collect the additional information.

While the Commission is expected to call for “relatively minor conditions” to the deal, including “divestments and behavioral commitments,” according to the paper, officials have yet to find a compelling reason to block the merger.

But in affirming that the music companies’ additional information was expected by Wednesday, and EC official objected to the Financial Times report’s assessment of the situation. “This story is highly speculative and completely premature,” EC Spokeswoman Amelia Torres told Reuters. "The European Commission is still carrying out its investigation with a view to concluding whether there are grounds for a statement of objection."

Reuters cited sources inside Bertelsmann saying they expect there will be a statement of objection, which would list specific issues the EC will need to have resolved before approving the merger.

Meanwhile, Europe’s association of independent record labels, Impala, reportedly met with EC officials at the end of April to reiterate the group’s objections to the merger, which it sees as inviting Sony-BMG to dominate the music market.

The original EC review deadline for the merger was June 22. Once officials are satisfied that the new information supplied by the companies answers their questions, a new deadline will be set.
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