EMI and Warner Call Off Music Mega-Merger

EMI Music and Warner Music Group said today they're calling off the merger of the two music labels.

The companies said that they have been in negotiations with the European Commission, discussing a range of possible concessions aimed at responding to the Commission's concerns while preserving the economic merits of their proposed joint venture.

Although the merger is off, the labels have agreed to continue discussions to see if a better deal can be struck.

Eric Nicoli, Chairman of EMI Group said: "The withdrawal of our application allows additional time to reassess regulators' concerns and to pursue solutions simultaneously in Europe and the U.S. We have been, and will continue to be, flexible in responding to the European Commission's concerns. However any concessions that are ultimately made must be consistent with our shareholder value objectives."

When the merger was announced early this year, it would have been the largest music label in the world. The proposed mega-label would have been the property of the merged AOL/Time Warner company.