AOL to buy Europe stake

December 4, 2001 Posted: 0852 GMT

LONDON (CNN) -- AOL Time Warner plans to buy Bertelsmann's  stake in AOL Europe when the German media company exercises its option to sell its stake.

Co-Chief Operating Bob Pittman said that the world's largest Internet and media company would buy the business in which Bertelsmann owns a 49.5 percent stake.

AOL Europe has about 5 million subscribers and is an important part of AOL's international expansion. In March, AOL bought the a 55 percent stake in AOL France from Vivendi Universal (PEX) for $725 million.

Bertelsmann has the right to sell 80 percent of its stake for about $6.76 billion before January 31 and the remaining stake by July 1.

The value of the stake is hugely inflated compared with the current value of dotcoms but AOL (AOL: down $1.32 to $33.58, Research, Estimates)  agreed at the height of the technology and Internet boom in March 2000 to buy the stake.

Pittman also noted that Bertelsmann provided much of the financing for the AOL Europe so AOL Time Warner was really paying for 100 percent of the venture at not much more than it had originally put in.

Bertelsmann told AOL Time Warner, parent of CNN, that it may buy back the stake between December 15 and January 15.

Executives at AOL Time Warner have indicated that they would increase revenue in Europe from 17 to 50 percent over the next 10 years. European revenues were $4 billion to $5 billion last year out of a total of $36.2 billion.