On Monday, January 10, 2000, America On-line, the leader in on-line
services, has announced their acquisition of Time Warner, the world's
largest media and entertainment company. Valued at approximately US$180
billion, the stock for stock merger is what will be the biggest corporate
merger ever. America On-line's chairman and chief executive, Steve Case
will serve as chairman of the merged company entitled AOL Time Warner. AOL
and Time Warner will each name half of the board of directors of the new
company. Time Warner's chairman Gerald Levin and chief executive of the new
AOL Time Warner said, "This really completes the digital transformation of
Time Warner. These two companies are a natural fit." The union creates a
combined company which features a market capitalization of $350 billion and
an annual revenue topping $30 billion. The deal values Time Warner at about
$110 a share, a high percentage over its $64.75 a share value late Friday.
AOL shareholders will own 55 percent of the combined company and Warner
shareholders will own the rest. Government approval of the deal is still
pending. If the merger is okayed the combined AOL, which provides high
speed Internet access to over 20 million subscribers, and Time Warner, the
media content leader, has the potential to steer the future direction of
the commercial media market. Christopher Dixon, media analyst with
PaineWebber, said to CNN, "Today's announcement really underscores the
strength of the Internet. The Internet is here and it's no longer just
about techs. It's about broadband, it's about streaming video, it's about
streaming music and it's about coming up with all kinds of ways to use your
computer in a very TV-like experience."
Rick DeMott
Animation World Network
Creator of Rick's Flicks Picks
