Jazzbo, Universal is the largest record company, so I don't believe the govt will allow them to merge with anyone else in the business. Maybe now that Universal is owned by a French company the US govt's anti-trust laws are irrelevant, but my understanding is that the new EU anti-trust laws are similarly enforced.
I imagine that a movie studio might be the best fit for a record company, in that the distribution of CDs and DVDs would go well together, both physical delivery and via the internet.
However, since the future of that distribution is up in the air, what with Kazaa, etc., maybe nobody in the movie business wants to take on more of the same troubles!