U.S. media titan

Time Warner

(TWX)

and British music publisher

EMI

ditched their current merger agreement after the European Union's antitrust regulator expressed doubts about the deal,

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Reuters

reported this morning. The two companies will continue talks on a deal that could get regulatory approval, however.

EMI and Time Warner had offered to sell some assets, including record labels, publishing catalogues and distribution networks, as well as offered several pledges to try to get their deal approved.

Some sources say the EU's antitrust watchdog is close to approving Time Warner's $135 billion merger with Internet giant

America Online

(AOL)

.