NEW YORK (Reuters) – Time Warner Inc. said on Thursday it would sell AOL France’s Internet access unit to Neuf Cegetel for $365 million as it overhauls its online business in Europe to boost advertising.
Time Warner, the world’s largest media company, put its Internet access business in European markets up for sale as it retools AOL into a free Web destination where popular e-mail and entertainment services are supported by advertising.
The company had entered exclusive negotiations with Neuf Cegetel, France’s second-largest fixed-line operator. The deal requires approval from French authorities, which may be obtained by the end of October.
AOL France’s access business includes about 500,000 high-speed Internet customers, as well as a customer service operation of some 500 employees. Neuf Cegetel has also agreed to hire up to 140 AOL France employees.
The deal provides for Time Warner’s AOL unit to expand its presence in France by providing editorial content and managing online ad sales for all of Neuf Cegetel’s Internet portals in a revenue-sharing deal beginning in 2007.
AOL retains its own French Internet site with nearly 5.5 million unique monthly visitors.
Once AOL completes the sale of its European access businesses it will be “a leading provider of audience services in Europe,” Time Warner Chief Executive Dick Parsons said.
Neuf Cegetel will raise its base of high-speed Internet customers to 2 million before the end of 2006 — a year earlier than planned — due to the acquisition. The company already provides most of AOL France’s high-speed connections on a wholesale basis.
It hopes to accelerate market-share growth by convincing more of AOL France’s dial-up customers to move to faster broadband access as well.
Telecom Italia agreed earlier this month to buy AOL’s access business in Germany for 675 million euros. AOL is still seeking the sale of its British access operations.
Time Warner shares rose 16 cents, or 0.9 percent, to $17.77 on the New York Stock Exchange.