Record Club Gets OK to Acquire Stake in CDNow

Columbia House, the music business jointly owned by Sony Corp. of America and Time Warner Inc., won European Union approval to buy a stake in CDNow Inc., an online seller of compact discs and videos. The European Commission, the EU’s executive agency, said the combination won’t threaten fair competition in European markets. Sony and Time Warner will each own 37% of the company and CDNow shareholders will own the remaining 26%. Columbia House, the largest music and video club in the U.S. and Canada, had 1998 sales of $1.4 billion, while Jenkintown, Pa.-based CDNow had 1998 sales of $98.5 million. CDNow said last week that Sony and Time Warner are working with the Federal Trade Commission on its approval. The new company will combine the marketing muscle of Columbia House and major media backers Time Warner and Sony with CDNow’s online-retailing experience. In NYSE trading, Time Warner shares rose $1.44 to close at $66.94 and American depositary receipts of Sony surged $19.06 to close at $230.38.