Following last week's clearance by the Justice Department on
antitrust grounds and a Netscape shareholder vote of approval on
Wednesday, America Online Inc's takeover of Netscape Communications
Corp is now a done deal. At a special meeting, Netscape
stockholders approved the stock-for-stock, pooling-of- interests
transaction, in which they will receive 0.90 shares of AOL common
stock for each Netscape share held.
In a vote that took just a few minutes, the shareholders
overwhelmingly approved the deal, with 99.75% voting in favor of it
and making the company a wholly-owned subsidiary of the world's
largest online service. AOL is promising more information on the
business plan for the combined company next week, with further
details on the related alliance with Sun Microsystems Inc - which
is to buy Netscape enterprise software line for about $1bn - due
shortly after that.
The deal, which was originally valued at $4.28bn in November, has
since skyrocketed due to gains in AOL shares and is now worth
roughly $10.18bn based on Wednesday's AOL closing price and an
estimated 103.7 million outstanding Netscape shares. AOL ended the
session Wednesday at $109.0625, up $4.125, while Netscape closed up
$3.5625 at $97.625.
Separately, AOL's European subsidiary said Wednesday that it plans
to triple its subscriber base by 2002, when it aims to have 10
million members. AOL Europe's CEO Andreas Schmidt, speaking at the
CeBit technology trade show in Germany, warned, however that high
phone service rates in Europe threatened to curtail European
internet usage. AOL currently boasts 2.6 million subscribers in
Europe, which gives it a 25% market share. á
