By Sue Zeidler

LOS ANGELES (Reuters) - Music industry executive Clive Davis, who turned Arista Records into a major force only to be ousted last month, is close to a new record label deal with Arista's parent BMG, sources said Wednesday. One source said the joint venture, worth about $150 million, would be announced in mid-July.

"I know it's close. I'm confident it will happen,'' said another source familiar with the talks between Bertelsmann Music Group and Davis, who is credited with boosting the careers of Janis Joplin, Bruce Springsteen, Whitney Houston, and Carlos Santana.

Davis, 67, whose last official day at Arista is June 30, was unavailable for comment. The legendary hitmaker founded and ran the label for 25 years.

"We have no official announcement at this time,'' said a spokesman for BMG, the $4 billion entertainment arm of Bertelsmann AG.

Producer/songwriter Antonio "L.A.'' Reid takes over Arista on July 1, succeeding Davis who had been embroiled in a feud with BMG since November when BMG Entertainment President and Chief Executive Officer Strauss Zelnick let it be known that he planned to replace Davis with Reid.

Many of Arista's artists were outraged and pledged support for Davis, although several of Arista's big stars like Carly Simon and Carlos Santana are remaining at Arista under Reid.

Reid, a Grammy-winning producer, most recently served as co-president of LaFace Records, which he co-founded with Kenneth "Babyface'' Edmonds as a joint venture with Arista.

"I've met L.A. Reid and he's ... super. I like him tremendously, and he's very smart, and I'm looking forward to working with him,'' said veteran singer-songwriter Simon, who recently released a new album, "The Bedroom Tapes.''

"(Reid) wasn't why I signed with Arista but you never really know what is going to be around the next corner. As far as being around the next corner, I'm glad that it's L.A. Reid,'' she said.

Davis leaves Arista amid its best sales year ever, with revenues up about 30 percent from last year's $420 million. An Arista source said Santana would issue a statement within the next day regarding his decision to stay at Arista, which was seen as a surprise by industry insiders since the Mexican-born guitar virtuoso had been very vocal about his desire to remain with Davis.

Santana staged a major comeback this year, largely fueled by Davis who resurrected Santana's career by teaming him up with various hot new musicians for his hit "Supernatural'' album.

"Without Clive's conviction, tenacity and belief, this would never have been possible,'' Santana, 52, said in February as he took the Grammy Award for album of the year.