BUSINESS NOTES INFLATION EDGES HIGHER IN MAY.

WASHINGTON - Consumer inflation edged up a smaller-than-expected 0.1 percent in May as lower costs for gasoline helped blunt the biggest jump in food prices in more than 18 months. Still, a new survey by the Federal Reserve found scattered signs of ``worsening price inflation.''

The tiny advance in the Consumer Price Index, the most closely watched inflation gauge, came after consumer prices showed no change in April, the Labor Department said Wednesday.

Economists believed that the report based on surveys taken early in the month did not capture energy price increases, particularly for gasoline, that came later in May. As a result, June's CPI report is likely to show large jumps in gasoline and other energy prices, analysts said.

AUTO DEALERSHIPS IN MERGER TALKS

Merger talks between two of the San Fernando Valley's largest auto dealerships are ongoing and could result in a deal being finalized within two weeks.

Mike Swenson, general manager of Woodland Hills Honda, said Wednesday that a agreement to sell the dealership to Keyes Motors ``is in the works but isn't expected to be finalized until the end of the month.''

``We don't own it yet,'' said Larry Abramson, vice president of operations for Van Nuys-based Keyes Motors.

Both Abramson and Swenson declined to reveal the terms of any possible deal to sell the dealership.

Woodland Hills Honda has operated at 6111 Topanga Canyon Blvd. for the last 30 years, said Swenson.

- Daily News

TIME WARNER/EMI MERGER PROBED

BRUSSELS, Belgium - Citing concerns of customers, competitors, trade and consumer groups, the European Commission opened a full antitrust probe Wednesday into the merger of Warner Music, a Time Warner Inc. unit, and EMI Group PLC.

In a statement, the commission said it was concerned the merger will lead to only four firms - Warner/EMI, Seagram's Universal Music Group, Bertelsmann Music Group and Sony Music - gaining control of ``some 80 percent'' of the European market, comprising the 15 EU nations, plus Norway, Iceland and Liechtenstein.

In music publishing, Time Warner/EMI would control ``by far the largest number of copyrights in the world and would be considerably larger than the next largest competitors,'' it added.

``There are strong indications that Time Warner/EMI could become dominant in the digital delivery of music via the Internet especially . . . considering the merger between America Online and Time Warner.''

- Associated Press