AOL to merge with Time Warner

America Online is expected to announce a merger with Time Warner today, a move wqhich will create a media colossus with turnover of $30 billion and a market cap of around $247bn (£153bn).

The merger is expected to be finalised by the end of this year but the deal depends on the approval of shareholders from both companies and regulatory approval. AOL shareholders will own around 55 per cent of the new company and receive one stock for each AOL stock whereas Time Warner shareholders will receive 1.5 shares and own 45 per cent of the company.

Steve Case, AOL chairman, chief executive and likely chairman of the new company, said in a statement: "This is a historic moment in which new media has truly come of age."

Time Warner president Richard Parsons told AP: "This is a defining event for Time Warner and America Online as well as a pivotal moment in the unfolding of the Internet age." ®