America Online, Inc., and Vivendi Universal are restructuring their relationship in France in a deal that allows Vivendi Universal companies Cegetel and Canal+ to exchange their stake in the AOL France joint venture for shares in AOL Europe. In addition, the two companies will enter into other distribution and marketing activities.
Under the agreement, Cegetel and Canal+ will exchange their 55 percent share in AOL France for junior preferred shares in AOL Europe valued at $725 million. The preferred shares pay a 6 percent dividend. AOL Europe will redeem the preferred shares in April of 2003 with cash, publicly traded AOL Europe common stock or AOL Time Warner stock, with certain restrictions.
“This transaction allows us to achieve an excellent return on our investment in AOL France. And at the same time, it allows us to focus our resources on our own strategic objectives in the interactive medium and elsewhere as we pursue our goal of being the world’s preferred creator and provider of personalized information, entertainment and services across a full range of platforms,” said Philippe Germond, chairman and chief executive officer of Cegetel and VivendiNet. “Two-thirds of the value of this transaction will go to Cegetel, and will be used to finance the UMTS license in France, which will be entirely financed by Cegetel. Cegetel will remain a key telecom partner for AOL France.”
Michael Lynton, president of AOL International, added, “Following last year’s agreement to restructure our joint venture in Europe with Bertelsmann, this transaction highlights America Online’s increasing commitment to its international services, which are playing an ever-greater role in our subscriber growth. We are excited about the opportunity in France, where the market is moving rapidly to a flat-rate model and where AOL France has already added hundreds of thousands of new members through our flat-rate and other attractive pricing promotions.”
The Dulles, Va.-based AOL can be found on the Web at http://www.aol.com. Vivendi’s site can be found at http://finance.vivendiuniversal.com/.
AOL, Vivendi Restructure French Deal
