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Telecom Italia to Buy AOL Unit

September 18, 2006|From Reuters

Telecom Italia agreed to buy Time Warner Inc.'s AOL Internet access business in Germany for 675 million euros ($854 million) in cash, the companies said Sunday.

The companies expect to close the deal within six months after regulatory approvals.

The move would make Telecom Italia the second-largest broadband provider in Germany, with more than 3.2 million total subscribers including nearly 2 million broadband customers, the companies said in a statement.

AOL, which has struggled with the defection of millions of its Internet access subscribers, recently announced changes in its strategy, including a sale of AOL's access business in European markets.

It has aimed to strike deals with European telecommunications operators to sell off its access business but retain agreements to make the AOL.com free website and services the default setting for those subscribers.

In France, it has entered into exclusive negotiations to sell its access business in the region to Neuf Cegetel.

"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," Time Warner Inc. Chief Executive Richard Parsons said in a statement.

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