Media giants Sony and Bertelsmann are preparing for close regulatory scrutiny after formalising plans to merge their music units.

Last month the two firms unveiled proposals for a 50-50 global music partnership comprising Sony Music and Bertelsmann's BMG arm [WAMN: 07-Nov-03]. Late last week the duo reached a deal, signing a binding agreement to combine their recorded music operations (though not the music publishing, manufacturing and distribution activities) throughout the world except Japan.

The next step is to convince antitrust watchdogs in Europe and the US to approve the deal. Given that the two businesses are among the world's biggest music groups, that may prove tricky, though the weak state of the global music industry may work in their favour.

Regulators are expected to announce their decision in mid-2004.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff