By Vanessa Mock
BRUSSELS--European Union competition chief Joaquin Almunia has
described negotiations over Universal Music Group's proposed
acquisition of EMI Music as "very tough."
Speaking during an interview in Brussels late Tuesday, he said
discussions with UMG were continuing but gave no indication on when
the music giant would come with its offer to address major
regulatory concern over the $1.9 billion deal. The tie-up would
create a music behemoth in Europe and give the merged entity a
market share of over 50% in some key European countries.
In recent days, the European Commission team that is reviewing
the deal has questioned the company's plan to reduce its market
share below 40%, further delaying progress in the negotiations,
according to people familiar with the matter.
"It's true that it's very tough," Mr. Almunia said, referring to
efforts to find a breakthrough on weeks of talks. "There will be a
lot of work looking at this merger."
During a press conference Wednesday, Mr. Almunia confirmed that
regulators were still waiting for a package of so-called remedies
from Universal. "Once we receive them...we will market test those
remedies and assess the results during August."
The final deadline for regulators to give their decision is the
end of September.
Universal is due to pay EMI Music's owner, Citigroup Inc. (C),
more than $1.7 billion of the purchase price by early September,
regardless of whether regulators have approved the deal by then.
Citi and Universal, which is owned by Vivendi SA (VIV.FR), have
discussed extending the payment deadline by about two months, but
haven't reached an agreement.
Write to Vanessa Mock at vanessa.mock@dowjones.com
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