BMG ditches Time Warner for Sony

GERMAN media giant Bertelsmann's music arm, BMG, has walked away from the mating dance with AOL Time Warner Music to seek a link with Sony.

The move opens up the field for EMI, home to ageing rockers The Rolling Stones, to pursue a merger with Warner Music in a deal that could top $1.5bn (£1bn).

A fusion between BMG and Sony Music Entertainment would create a colossus with annual revenue of more than £6bn and bring together a galaxy of stars.

Sony boasts Bob Dylan and Destiny's Child, BMG has Christina Aguilera, Norah Jones and Annie Lennox.

Consolidation is the name of the game for the Big Five music groups - BMG, EMI, Sony, Universal and Warner - as the industry has suffered depressed CD sales over the past few years, which they attribute to free downloads.

BMG-Time Warner talks stalled over merger costs and fine print. Some sources say the door has been left open but the negotiations with Sony look like ending hopes of a pact.