Telecom Italia will buy AOL's Internet business in Germany for $ 870 million.
Telecom Italia & AOL Germany have announced the acquisition of latter by the former for €675 million in cash ($ 870 million).
This acquisition will see Telecom Italia becoming the 2nd largest provider of broadband services in Germany with over 3.2 million subscribers including around 2 million subscribers for its broadband services.
AOL, struggling with its falling subscriber base has announced few alterations in its marketing strategy that includes selling its access business to Markets in Europe. AOL is looking to make deals with telecom operators in Europe to sell its access business such as AOL.com & services remain default for its former subscribers. AOL has made special negotiations for selling its French access business to Neuf Cegetel.
"AOL is strategically focusing on profitable areas and dumping off those which it feels are non-profitable. We can expect more acquisitions of AOL's access businesses in future", said an analyst at RNCOS.
As per the reliable source, Telecom Italia and other firms were interested in AOL Germany in an early September auction. Telecom Italia had already made offers for German & French businesses of AOL in June 2006.
As per Chief Executive of Time Warner, Dick Parsons, the deal to sell off AOL Germany is the part of their strategy to concentrate on their main assets to make profits for AOL's growth. The acquisition is expected to complete 4-6 months after the regulatory approvals.
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