Sunday, September 10, 2006

Telecom Italia to Acquire AOL Germany for EUR 675 Million

Telecom Italia has agreed to acquire Time Warner's AOL Germany Internet access business for EUR 675 million ($870 million, Equity Value) in cash.

Under the deal, AOL will provide co-branded audience services and content on a joint web portal for all of Telecom Italia's residential Internet access subscribers in Germany and will handle all online advertising sales. As part of a five-year partnership, AOL will also provide these services for Telecom Italia's entire residential Internet access customer base in Germany.

AOL Germany has operated as an ISP for over 10 years and competes in both narrowband and broadband Internet access. As of June 2006, AOL Germany, ranked second and third among German narrowband and broadband access providers, had 1.1 million broadband subscribers and approximately 1.3 million narrowband subscribers.

Telecom Italia said it is seeking to expand its presence in Germany, which started with its acquisition of Hansenet in 2003. Once its acquisition of AOL Germany's Internet access business closes, Telecom Italia will be Germany's second-largest broadband provider - with more than 3.2 million total subscribers, including nearly 2 million broadband customers.