AOL and Time-Warner Merge
or: How AOL Became a Brick and Mortar Company
AOL and Time-Warner announced on Monday (January 10) that they have agreed
to merge in an all-stock transaction. At the time of the agreement, the
combined companies would have had a value of $350 billion. To be named AOL
Time-Warner, the company will have in excess of $30 billion in annual
revenue.
Under the terms of a definitive merger agreement, which was approved by
unanimous vote at each company’s board of director’s meeting, 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. AOL shareholders will receive 1 share of
AOL Time-Warner stock for each share of America Online stock they own. When
this tax-free transaction is completed, AOL’s shareholders will own
approximately 55% and Time-Warner’s shareholders will own approximately 45% of
the new company.
Part 2 - Analysis
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