It's a rock'n'roll merger race

DRAMATIC merger moves are on the way among stricken music publishing and recording giants as they struggle with losses, piracy, internet downloading and fickle pop fashions.

Britain's EMI - boasting stars including Robbie Williams and the Rolling Stones - has lined up loans to finance a £1bn merger with the loss-making Warner Music arm of Time Warner, best-known for Madonna and Frank Sinatra. Time Warner would end up owning a large slice of the combine.

Meanwhile, German media giant Bertlesmann - with Britney Spears and Pink - is set to merge its music arm with Sony of Japan, whose stable includes Michael Jackson and Beyonce Knowles.

The musical quartet are in a race to announce their deals because regulators on both sides of the Atlantic may bless one merger, which would reduce the Big Five music labels to four, but they will not like the industry collapsing further.

EMI shares slipped 3p to 177p after broker Morgan Stanley estimated merger cost savings of £160m, but said investors should be 'underweight' in the shares.