AOL to blow $6.7bn on AOL Europe
AOL Time Warner is tipped to announce today that it is to acquire Bertelsmann's half of AOL Europe for $6.7 billion (£4.66 billion) in cash and shares.
The monster Internet and content outfit is due to brief analysts about its outlook for the coming year.
Many commentators believe AOL will signal that, like other companies in the TMT sector, that it has not been cushioned from the global economic slowdown and is expected to lower its predictions for growth over the coming year.
But it's also thought that AOL will also use the opportunity to explain more fully its deal with media giant Bertelsmann, which was made public in March 2000.
At the time AOL agreed to buy Bertelsmann's 50 per cent stake in AOL Europe - a joint venture between AOL Inc and Bertelsmann - for between $6.75bn and $8.25 billion, but not until after January 2002.
However, that figure was determined at the height of the dotcom boom when valuations were sky-high, and so, is likely to be at the bottom end of the range. A more realistic valuation today for the half share would be less than $2 billion.
No one at AOL Time Warner was available for comment by press time. ®
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