Rival firm acquiring AEI Music Network

Liberty Digital, an interactive-media company, is merging its DMX Music subsidiary with Seattle-based rival AEI Music Network to create a company providing interactive music to consumers and businesses.

DMX and AEI had been competitors in the market to offer music--via broadcast, digitized format and onsite CD players--to retail shops, cable customers, hotels and other businesses.

After the merger, the new company--yet to be named--will be majority-owned by Liberty Digital, a subsidiary of Liberty Media. AEI Music shareholders will own the rest.

Financial terms were not disclosed, but AEI had about $110 million in sales in 1999. Los Angeles-based DMX had about $85 million.

The merger, expected to be completed before the end of the year, requires "government approvals, financing commitments for ongoing operations of the business and cash payments to AEI Music shareholders," the companies said.

The new board of directors will consist of three directors from DMX Music and two from AEI Music.

Michael Malone, AEI's chairman and chief executive, will be chairman of the new company. Lon Troxel, president and chief executive officer of DMX, will become president and chief operating officer. A CEO will be named later.

The companies would not speculate on where the merged entity will be headquartered or if it will remain private.

AEI has about 450 employees, with about 300 in the Seattle area.