America Online(AOL) the one time high flyer and primary jumping point for the Internet has gotten smaller today with the selling of it’s UK division to Carphone Warehouse for 370 Million pounds, about $690 million USD.
The deal will give Carphone around two million broadband customers and make it the third largest provider of high-speed Internet in the UK.
It came as the mobile phone retailer revealed losses from offering “free” broadband to 625,000 of its Talk Talk customers will hit £70 million this year.
Carphone was one of the first operators in the UK telecoms market to offer customers combined Internet and telephone services.
The deal with Time Warner, the parent of AOL, will see Carphone acquire 2.1 million Internet users, including 1.5 million on broadband to add to its own Talk Talk customers.
The completion of the deal is subject to EU competition authority clearance and is expected to take place by 31 December 2006. Time Warner anticipates the acquisition would increase current year pre-tax profits by about GBP 10 million and next year’s pre-tax profits by GBP 30-40 million. Time Warner Stock is up slightly as of the time of this report.
