by CIO Staff

AOL to Sell German ISP to Telecom Italia for $853M

News
Sep 18, 20062 mins
Mergers and Acquisitions

Telecom Italia will acquire the Internet access unit of AOL in Germany for 675 million euros (US$853.5 million) in cash, the two companies announced Sunday.

The move comes amid a reorganization by Telecom Italia that saw a failed bid to sell its mobile phone unit last week and the resignation of Chairman Marco Tronchetti Provera Friday.

AOL’s parent company, Time Warner, has been eager to dispose of its ISPs, where its subscriber numbers have been declining.

Telecom Italia made the buy in order to consolidate its broadband access service in Europe, the company said. The move would make the company the second-largest Internet access provider in Germany with more than 3 million subscribers, it said.

Under the deal’s terms, AOL will provide Telecom Italia with cobranded entertainment services to all of its residential customers for five years. AOL will also retain responsibility for all online advertising, also for five years.

The deal is expected to close in four to six months and is subject to regulatory approval.

-Steven Schwankert, IDG News Service (Beijing Bureau)

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