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AOL & Time Warner Merge Into New Media Giant

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."

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