U.S. Internet giant America Online (AOL)
(AOL.N) is negotiating to buy German media company Bertelsmann's
(BTGGga.F) 50 percent stake in AOL Europe, The Observer
newspaper reported on Sunday.
Citing sources in Germany, The Observer said the talks had
been going on for several days and that the impetus for such a
deal had come after AOL which owns the other 50 percent in
AOL Europe merged with Time Warner Inc (TWX.N) last month.
The newspaper said AOL Europe, which announced on Friday
that it had increased its subscribers to 3.8 million from 2.8
million last September, was estimated by analysts to be worth
some $7 billion.
AOL Europe is Europe's second largest Internet service
provider behind Deutsche Telekom AG's (DTEGn.DE) T-Online
service, which has more than 4.2 million users.
In a separate Sunday Times article, Chief Executive Andreas
Schmidt was quoted as saying that AOL Europe would next month
eclipse Freeserve, Britain's top Internet provider, as the
biggest Internet service provider (ISP) in the UK.
Schmidt said AOL Europe would take first place after its
high-profile one-pence-per-minute advertising campaign and the
launch in Britain of Netscape Online, its subscription-free
After the AOL/Time Warner merger, speculation had mounted
that AOL Europe could be floated, but Schmidt said on January 13
that there were no immediate plans for an initial public
offering of the business.
The Observer said that by selling its stake in AOL Europe,
Bertelsmann would have a war chest that it could use to develop
its multimedia operations and invest in Internet start-ups.