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
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