WorldCom to buy CompuServe Corp
Article Abstract:
WorldCom has purchased CompuServe from H&R Block for approximately $1.2 billion in stock as part of a deal that includes America Online (AOL), insiders said. The complex deal alters the on-line industry and establishes WorldCom as a major network that serves AOL and Microsoft's Microsoft Network, the two largest commercial on-line services, plus thousands of corporate clients. Cash-strapped AOL may benefit the most from the transaction, as it will gain CompuServe's three million consumer users. AOL will widen by more than 30% its commercial membership to 12 million customers. Terms call for WorldCom to acquire all 1,200 corporate customers from CompuServe. WorldCom will transfer its customers to AOL and pay AOL around $175 million in exchange for AOL's high-speed Internet access division, ANS Communications. Another provision allows German media company Bertelsmann to pay AOL $75 million to continue its 50% share of pan Europe's largest on-line service.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1997
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AOL, CompuServe pact is threatened; tax-rule proposal creates possible danger for deal, making it less likely
Article Abstract:
America Online's (AOL) acquisition of Compuserve may no longer be possible, due to new legislation proposed in Congress that would close a tax loophole known as the Morris Trust. Executives say that discussions to combine the two largest on-line services are no longer being held, as an imminent merger is now highly unlikely. A combination of AOL and CompuServe would have created an online company with over 10 million subscribers, more than 1,100 business customers and revenue exceeding $2 billion. AOL has been very eager to acquire CompuServe's one million international subscribers, a move that would benefit AOL's own efforts abroad. By not merging, the individual companies are now far more vulnerable to smaller, but fast-growing competitors such as Microsoft.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1997
User Contributions:
Comment about this article or add new information about this topic:
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