KKR, Bertelsmann plan music venture -- source

* KKR would have 51 percent of venture - source

* Follows a number of private equity catalog deals

* Bertelsmann already owns music rights business

By Megan Davies and Yinka Adegoke

NEW YORK, July 7 (Reuters) - Media group Bertelsmann [BERT.UL] and private equity firm Kohlberg Kravis Roberts & Co [KKR.UL] are planning to form a music rights management joint venture, a source familiar with the matter said on Tuesday.

Such a deal could be a more efficient way of managing rights under one roof, and would mark a more aggressive push into the music business for the privately held German media giant, which has largely exited the industry.

Bertelsmann pulled out of a recorded music joint venture with Sony Corp (6758.T) in August 2008 and sold its music publishing business in 2006.

However, in October it announced plans to build a new music rights business called BMG Rights Management.

It launched that business with a selection of European music catalogs retained from the venture with Sony, which included about 200 artists such as the Scorpions and Terence Trent D'Arby, the firm has previously said.

A deal would mark the latest in a string of investments made by pension funds and private equity firms into high profile music assets. Investors are attracted by catalogs of published songs that provide steady, recurring cash flows.

The venture would likely be 51 percent owned by KKR, said the source, who declined to be identified because the talks were private. A deal could be announced in the next few days.

Reports of a deal were earlier published in the German press, which speculated that such a venture could look for acquisition targets such as EMI Group's music publishing assets. EMI is owned by British private equity firm Terra Firma [TERA.UL].

It was unclear how much will be invested in the venture although the source said that KKR would likely make an initial investment of 200 million euros.

Bertelsmann and KKR declined comment.

Among other deals that have been struck are Dutch fund ABP, the world's third-largest state pension fund, which earlier this year bought the legendary Rodgers & Hammerstein catalog of songs. ABP also owns some music catalogs that include the rights to some songs by Michael Jackson -- and demand for music by the "King of Pop" has rocketed since his death.

A separate deal saw private equity firm Pegasus Capital pay an estimated $55 million for Spirit Music Group, a song publisher with rights to some of the works of artists ranging from Frank Sinatra to Madonna.

(Editing Bernard Orr)