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AOL Europe deal closer
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March 1, 2000: 4:16 a.m. ET
Bertelsmann says near agreement with AOL on future of ISP; float possible
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LONDON (CNNfn) - Bertelsmann, Europe's biggest media company, said it is close to a deal with America Online that could lead to the flotation of their 50:50 joint venture AOL Europe, the region's second-largest Internet access provider.
The fate of AOL Europe, valued by analysts at about $20 billion, has been in question since the U.S. company announced its plan to merge with CNN's parent Time Warner (TWX: Research, Estimates), a key competitor of Bertelsmann in the global music and magazine publishing market.
However, Klaus Eierhoff, the board member responsible for multimedia at Bertelsmann, said the company was under no pressure to sell its AOL Europe stake to a strategic investor, adding that a flotation was possible.
Bertelsmann had already been considering the float of AOL Europe because owning a chunk of a highly rated and publicly traded company would give it shares that could be used as acquisition currency for the privately-held company. Bertelsmann said Wednesday that it values its entire Internet assets at 45 billion German marks ($22.2 billion).
However, the AOL-Time Warner deal led to speculation that Bertelsmann may seek a speedy exit from the business, with suitors such as French media and utility group Vivendi (PEX) declaring an interest in its AOL Europe stake.
Bertelsmann revealed that its Net-based sales doubled last year to 2 billion marks and said it aims to make the business profitable in four to five years.
The latest move on the AOL Europe front came a day after Bertelsmann revealed a 75 percent rise in operating profit to 1 billion marks in the six months to end December. The result was boosted by the reduction of its stake in America Online (AOL: Research, Estimates) to 0.7 percent.
Sales rose 12.2 percent to 14.5 billion marks, led by growth in the United States where revenues rose 20.6 percent compared with an 11.4 percent rise in Bertelsmann's domestic market. 
-- from staff and wire reports
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