19 September 2000

The European Commission has give notice of its opposition to the proposed global mega-merger of internet titan America Online with Time Warner.

The EC’s antitrust stance toward the world’s largest ever merger – estimated capitalization $126 billion – is unlikely to soften unless both companies offer significant concessions. It is concerned that the merged duo would dominate the new technology environment, effectively excluding rivals.

But a Time Warner statement played down the threat of a block and proclaimed confidence that the deal with AOL will be finalized in the fall as scheduled: "This [draft recommendation] is a normal part of the process with the European Union", said the statement. "We are totally comfortable with where we are at this stage of the negotiations … we are confident that the talks will conclude successfully."

The deadline for agreement to the EC’s demands is September 24. If the concessions are not forthcoming, the deal will be blocked.

Meantime, the UK’s EMI, also involved in $20 billion merger talks with Time Warner, will partner the latter in submitting complex new proposals to clear the three-way deal. These are due to be laid before the EC today.

News source: Financial Times