The news
Carphone Warehouse is buying the AOL UK internet-access business from Time Warner for £370 million.
The acquisition follows Carphone Warehouse's April unveiling of free broadband for customers of its Talk Talk phone services, a move that's claimed to have resulted in 625,000 applications over the last six months.
After the take over, the company's will, it says, have around two million broadband customers, making it the third largest broadband provider in the UK.
In addition, there will be around 600,000 dial-up customers carried over from AOL that it can try to upgrade, plus the prospect of flogging AOL subscribers mobile and landline phone services and also getting carry-over revenue from the sale of advertising and content.
The transaction is due to complete by 31 December 2006 and is subject to "EU competition authority clearance". Some £250 million is due to be paid on completion, with the remainder paid on the never, never - three instalments over the following 18 months. The acquisition is being funded from loans or, as the company puts it, from "an extension of existing bank facilities".
Carphone Warehouse is predicting that the buy-out will increase its current-year pre-tax profits by about £10m and boost next year's by £30-40 million.
Take a look at Carphone Warehouse's press release on page two, then comment in this thread in the HEXUS.lifestyle.news forum.
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External.links
Carphone Warehouse - home pageAOL UK - home page