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RTL Group Buys Bertelsmann Broadband Subsidiary

[London, ENGLAND] European media company RTL Group announced Friday its purchase of Bertelsmann Broadband Group for EUR 12.8 million (US $11.9 million).

Bertelsmann and RTL say they will continue to co-operate closely -- suggesting that the purchase is a convenience rather than an old-style acquisition.

The unit, purchased from Bertelsmann eCommerce Group (BeCG), will now form part of RTL NEWMEDIA, a subsidiary of RTL Television in Cologne. It will continue to develop broadband e-commerce applications while gaining access to the interactive TV platform and customers of RTL Group in Europe.

"Through this new arrangement, RTL Group and Bertelsmann intend to gain a clear competitive advantage over other providers of interactive broadband programming in Europe", said Ewald Walgenbach, chief operating officer of RTL Group.

Walgenbach went on to say that RTL Television is already the market leader in Germany for interactive media solutions. He also referred to the entertainment portal RTL World as being "by far the most successful German general interest Web site."

The deal, said Walgenbach, would enable RTL to offer cable network operators, and therefore cable customers, very attractive and innovative media content in the future.

Klaus Eierhoff, head of DirectGroup Bertelsmann and a member of the Board of Bertelsmann AG, said that by dividing tasks, the companies could optimize their core B2C competences.

Established as a pilot project in April 1999 by the multimedia division of Bertelsmann AG, the Broadband Group has been testing its services in ten German cities.

Bertelsmann's worldwide e-commerce activities are all bundled into the Bertelsmann eCommerce Group. Businesses that come under the BeCG umbrella are such well-known subsidiaries, shareholdings and partnerships as BOL, CDNow, Barnesandnoble.com and Napster.

The latest move is part of a general rationalization process currently taking place in Europe's e-commerce industry. Earlier this week Kirch Holding GmbH agreed to combine its Internet unit with that of ProsiebenSat.1 Media AG.

RTL Group, which last week announced the extension of its European online advertising network, IP-Web.net, into Hungary, has over 80 branded Web sites. It also produces TV programs in 35 countries and has interests in 23 television channels and 17 radio stations across Europe.