Time Warner, AOL To Merge In $350 Billion Deal - Update

The conglomerate will be named AOL Time Warner Inc. and will boast combined revenues of more than $30 billion, the partners said.

The new company will provide an important new broadband distribution platform for AOL's interactive services and drive subscriber growth through cross-marketing with Time Warner's brands.

The combined branding will include AOL, Time, CNN, CompuServe, Warner Bros., Netscape, Sports Illustrated, People, HBO, ICQ, AOL Instant Messenger, AOL MovieFone, TBS, TNT, Cartoon Network, Digital City, Warner Music Group, Spinner, Winamp, Fortune, AOL.COM, Entertainment Weekly, and Looney Tunes.

The partners reported that under the terms of a definitive merger agreement approved by unanimous votes by both boards of directors, Time Warner and AOL stock will be converted to AOL Time Warner stock at fixed exchange ratios.

Time Warner shareholders will receive 1.5 shares of AOL Time Warner for each share of Time Warner stock they own, while AOL shareholders will receive one share of AOL Time Warner stock for each share of America Online stock. AOL shareholders expect to control about 55 percent of the company, which will continue to be traded on the New York Stock Exchange under the symbol AOL.

Steve Case, chairman and chief executive officer of AOL, will become chairman of the board of the new entity, while Gerald M. Levin, Time Warner's chairman and CEO, will become the conglomerate's CEO, the companies said.

In deals cut separately from the merger transaction, AOL and Time Warner also announced new marketing, commerce, content and promotional agreements that will immediately expand various relationships already in place between the two companies, including AOL featuring Time Warner's InStyle magazine, CNN.com and Entertaindom.com programming on various America Online services. AOL members also will access a wide range of Time Warner promotional music clips; Time Warner and AOL MovieFone will participate in online-offline cross-promotion of Time Warner movies and related content, including live events; and broadband CNN news will be distributed on AOL Plus when it launches this spring.

Additionally, the partners said Warner Bros. retail stores will promote the AOL service through in-store distribution of AOL disks and will include AOL disks in promotional mailings and product shipments.

Reported by Newsbytes.com, http://www.newsbytes.com .

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