The Association of Independent Records Companies (AIRCO) announced today in Johannesburg that it would join its European counterpart, IMPALA , in its support of a proposed merger between the two music giants EMI and Warner Music .

 

This announcement followed the report on Thursday that EMI would open its books to Warner Music and other possible suitors, presumably for due diligence investigations.

Earlier merger discussions between EMI and Warner Music came to an end when a ruling from a European court annulled the Sony BMG merger. The ruling, which stunned the European business community last year, was as a result of an action brought by IMPALA on behalf of 2500 independent record companies.

More recently, Warner Music managed to reach an agreement with IMPALA to end its opposition to their merger with EMI. Under the terms of the agreement, a merged EMI and Warner would have to divest some assets to the independent sector, representing an agreed market share.

Irfaan Gillan, the chairman of AIRCO said “We believe that merger under such conditions would be beneficial to the South African music industry as a whole. We do not believe that the competition authorities in Europe or South Africa had properly evaluated the Sony BMG merger. This new agreement could be the template to solve this problem”

AIRCO’s membership is open to any record company that is at least 51% South African owned and is committed to investment in South African recorded works. Although its 100+ members are from the independent sector, AIRCO is committed to working closely with the major multi-national record companies in many areas of common interest such as anti piracy, copyright legislation and broadcast issues.

Gillan explains the important role that AIRCO has to play as follows: “It is understandable that our commitment to local music and transformation goes much deeper than that of international music companies. They have invested relatively far more money on international repertoire compared to South African music. It is therefore not surprising that this is where their priorities lie. The South African arms of Sony BMG, EMI and Universal are all wholly owned subsidiaries of large international corporations who have global agendas, of which South Africa is not a significant part. They are not as sensitive as we are of the need to transform the South African music industry. It is AIRCO’s responsibility to ensure that these critical issues are not overshadowed by the purely business and commercial interests of the multinationals.” he said.

AIRCO believes that co-operation with Warner Music and EMI will go a long way towards building a healthy and sustainable music industry in South Africa.

For further information contact: Lara Preston (Redflag) 011 447 8283 or e-mail: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Issued by AIRCO South Africa, 21 May 2007