US mobile carrier Verizon has said it will absorb Internet pioneer AOL in a multi-billion-dollar deal. It added the takeover would enable it to expand its footprint in an increasingly saturated cell phone market.
US telecommunications company Verizon reported Tuesday it would take over one-time Internet trailblazer AOL. The deal was valued at $4.4 billion (3.9 billion euros).
AOL was one of the first Internet service providers in the US and grew at a fast pace in the 1990s, enabling it to take over media giant Time Warner in the year 2000. A couple of years later, however, AOL's star started fading amid fierce competition from rival providers.
On Tuesday, Verizon said AOL still hat a lot to offer with its huge presence in landline, mobile and Internet services. It also noted the company's crucial digital content such as The Huffington Post and a host of advertizing platforms.
"We're excited at the prospect of charting a new course together in the digitally connected world," Verizon CEO Lowell McAdam said in a statement, conceding that the deal was still subject to regulatory approval.
Tuesday looked to be a good day for AOL shareholders as the stock rose almost 18 percent in pre-market trading in the US.
The cash deal valued AOL shares at $50 apiece, which was 23 percent more than the average price of the last three months. The transaction is to be completed in the next three to four months.
hg/cjc (AFP, dpa)