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International expansion - particularly in Europe - is key to AOL Time Warner's "sustained strong performance".

Confirming the $6.75bn acquisition of Bertelsmann's 49 per cent share in AOL Europe, AOL Time Warner signalled that Europe could become a key growth area for the Internet and media company.

Although it has yet to flesh out plans , AOL CEO, Jerry Levin said: "Looking ahead, we see our expansion in international markets as one of the major contributors to sustained strong performance.

"By leveraging AOL Europe's infrastructure, cross-company promotional abilities and other assets, AOL Europe can become the driver for company-wide growth in international consumer markets that AOL has become in the US."

Regarding the nitty-gritty of the deal, Bertelsmann will transfer 80 per cent of its stake in AOL Europe to AOL Time Warner on January 31, 2002 in return for $5.3 billion in cash.

AOL Time Warner will acquire the remaining 20 per cent for $1.45 billion in cash in July 2002.

Elsewhere, AOL Time Warner said it expects to post EBITDA (earnings before interest etc) growth of around 18 per cent for 2001.

However, seeing little improvement in the economy over the coming year AOL Time Warner believes revenue growth will slow to between 5 per cent and 8 per cent for 2002.

Looking further ahead, the company claims it can restore double digit growth in 2003. ®

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