Terra to buy Lycos for $12.5 bil

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Madrid-based Internet company Terra Networks SA agreed to buy Waltham, Mass.-based Web portal Lycos for $12.5 billion in stock, or $97.55 a share. The new company will be called Terra Lycos and will have a global reach with offices in 37 countries, including North America, Latin America, Asia and Europe. The companies predicted pro forma 2000 revenues of about $500 million and said they have a combined estimated 50 million unique users a day.

As part of the deal, Terra Lycos inked a five-year $1 billion advertising and commerce agreement with European media giant Bertelsmann. Terra Lycos will tap Bertelsmann's books, music and TV content and work on a way to deliver Bertelsmann's content digitally. Telefonica, a major provider of Spanish- and Portuguese-language telecommunications and media, agreed to underwrite a $2 billion rights offering by Terra. In exchange, Terra Lycos also will have access to all Telefonica's media content, which includes TV and pay-TV programming as well as radio.

Copyright May 2000, Crain Communications Inc.

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