Time Warner Inc. (NYSE:TWX):
-- Telecom Italia Continues its Strategy Focused on the
Development of its Broadband Business
-- Once Transaction Closes, Telecom Italia will be Germany's
Second-Largest Broadband Provider - Serving more than 3.2
Million Total Subscribers, Including 2 Million Broadband
Customers
-- AOL to Provide Co-Branded Audience Services for Telecom
Italia's Internet Access Subscribers in Germany
-- AOL Responsible for Online Advertising Sales
Telecom Italia (Milan:TIT,TITR; NYSE: TI, TIA) and Time Warner
Inc. (NYSE:TWX) today announced that Telecom Italia has agreed to
acquire Time Warner's AOL Germany Internet access business for EUR 675
million ($870 million, Equity Value) in cash.
The companies expect to close the transaction in four to six
months, after receiving the customary regulatory approvals.
In light of Germany's fast-growing demand for broadband Internet
access (over 12 million ADSL subscribers at 30 June 2006 that could
increase by 10 million in the next three years), Telecom Italia is
moving to consolidate its presence in Germany, which started with its
acquisition of Hansenet in 2003 and expanded with its organic growth.
Once its acquisition of AOL Germany's Internet access business closes,
Telecom Italia will be Germany's second-largest broadband provider -
with more than 3.2 million total subscribers, including nearly 2
million broadband customers.
Telecom Italia is already a European leader in broadband Internet
access. With its presence in Italy, France, Germany and Netherlands as
well as its pending acquisition of AOL Germany's Internet access
business, Telecom Italia will serve approximately 9 million broadband
subscribers in Europe.
Under a new partnership, AOL will provide co-branded audience
services and content on a joint web portal for all of Telecom Italia's
residential Internet access subscribers in Germany and will handle all
online advertising sales.
AOL Germany has operated as an ISP for over 10 years and competes
in both narrowband and broadband Internet access. As of June 2006, AOL
Germany, ranked second and third among German narrowband and broadband
access providers, had 1.1 million broadband subscribers and
approximately 1.3 million narrowband subscribers.
Riccardo Ruggiero, CEO of Telecom Italia said: "This acquisition
marks a further step in Telecom Italia's strategy of focusing on
Broadband services and content delivery at an international level.
Since we acquired Hansenet in 2003, our German presence has gone from
strength to strength, confirming the validity of Telecom Italia's
Broadband strategy, and with the AOL co-branding agreement our content
offer, as well as our customer base, grows."
Dick Parsons, Chairman and CEO of Time Warner Inc., said: "This
agreement to sell AOL Germany's Internet access business marks the
latest step in Time Warner's strategy of focusing on our core assets
to drive profitable growth. Our partnership with Telecom Italia
advances AOL's worldwide transition from a business built primarily on
providing Internet access to an advertising-supported business model.
We look forward to AOL continuing to grow its online advertising
business - both in the U.S. and overseas - to help create enhanced
value for our shareholders."
Under the terms of the five-year partnership, AOL will design,
host and operate audience services for Telecom Italia's entire
residential Internet access customer base in Germany. AOL will be
responsible for all online advertising sales for the co-branded
audience services. The financial terms of the audience services
partnership were not disclosed.
Jon Miller, Chairman and CEO of AOL LLC, said: "AOL's partnership
with Telecom Italia highlights the value of the Internet access
business we have built in Germany, as well as our programming assets
and advertising network. AOL's content and features will enhance
Telecom Italia's Internet service, and the scale of our advertising
network in Germany - Europe's second-largest online market - will
increase. This continues our strong momentum in building our worldwide
advertising business and serving a large and highly engaged audience."
About Telecom Italia
The Telecom Italia Group is a leading telecommunications group
which operates in across the entire advanced communications services
chain - fixed-line and mobile telephony, Internet, media, and
innovative business solutions and systems.
About Time Warner Inc.
Time Warner Inc. is a leading media and entertainment company,
whose businesses include interactive services, cable systems, filmed
entertainment, television networks and publishing.
About AOL
AOL and its subsidiaries operate a leading network of Web brands
and the largest Internet access subscription service in the United
States. Web brands include the AOL.com(R) website, AIM(R), MapQuest(R)
and Netscape(R). AOL offers a range of digital services in the areas
of education, safety and security, communications and music. The
company also has operations in Europe and Canada. AOL LLC is a
majority-owned subsidiary of Time Warner Inc. (NYSE:TWX) and is based
in Dulles, Virginia.
