from: CMU daily.

More merger rumours. As previously reported an EMI Warners merger is once
again in the offing, though the position of the two partners has changed
since the last time the two entered merger talks. This time EMI is looking
to buy a majority stake in Warner Music, rather than the other way round,
with Warners likely to consider being acquired rather than acquiring given
the financial situation of parent company AOL Time Warner.

A report in the Wall Street Journal said talks had begun between the two
majors, but that those talks were at "an early stage" and that any actual
deal isn't that imminent. As previously reported industry insiders hope EU
officials, who have blocked past major merger attempts on competition
grounds, would not be so difficult this time round after the EU courts
allowed the travel industry to consolidate into just three major players.

EMI may well be forging ahead with merger talks now after its success at the
Grammys - with EMI acts Norah Jones and Coldplay dominant on the night.

Neither side would comment on the merger rumours, though an EMI insider told
the BBC: "The whole of the music industry is talking to the rest of the
music industry and has been getting drunk with each other for the past three
nights."

Reports of an EMI and BMG merger still circulate too, though BMG's recent
takeover of Zomba may might that merger more difficult. Also EMI would
probably have to give up more control in a BMG deal meaning a Warners deal
is likely to be preferred.

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from Marty:

Will more mergers mean ever less choice in music? No doubt any mergets will mean more artists dropped (generally the less profitable/high profile) and more artists looking for a deal.