Luxembourg - The European Union's highest court has overturned a lower court's ruling that annulled approval of the merger of major record labels Sony Music (NYSE: SNE) and BMG, Reuters reported.

The European Court of First Instance rejected the European Commission's approval of the mega-merger in July 2006, after a review mounted at the behest of independent label trade group Impala.

The European Court of Justice has now set aside that decision, and ordered the Court of First Instance to go back and review all of the five pleas lodged by Impala, instead of just the two it relied on for its previous decision.

"The lower court can still set the approval decision aside," noted Impala executive chair Helen Smith.

"This result underlines the need for a complete overhaul as far as cultural markets are concerned."

Meanwhile, Bertelsmann is looking to sell its stake and remove itself from the record label joint venture, according to reports.

Related Links:
http://news.yahoo.com/s/nm/20080710/tc_nm/sony_bmg_eu_dc_3 (Reuters)

http://snipurl.com/2wcws (Impala statement)

http://snipurl.com/2wd2u (DMW previous coverage)

http://www.sonybmg.com