AOL to acquire Time Warner

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America Online will acquire Time Warner for $166 billion in stock, the two companies announced today, in what amounts to the largest corporate merger so far. It is also the first time an Internet company has been able to acquire a leading "old media'' company with properties in publishing, cable, movies and music.

AOL, founded in 1985 and based in Dulles, Va., has a market value of approximately $164 billion, and has 20 million subscribers. Time Warner, valued at $97 billion, owns CNN, TBS, HBO, Warner Bros. movies, TV and music studios and, under Time Inc., such well-known magazines as Time, People and Fortune. The combined company will be known as AOL Time Warner.

When completed, the deal will correct what has been perceived as a major failure on Time Warner's part to establish a viable new-media business. Last year, CFO Richard Bressler was named to develop new-media businesses.

Steve Case, AOL chairman-CEO, will become chairman of the merged company, while Time Warner Chairman Gerald M. Levin will become its CEO. The deal is expected to be complete by the end of the year.

Copyright January 2000, Crain Communications Inc.

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