Bertelsmann AG’s joint takeover with America Online Inc of CompuServe Corp’s German operations has been approved by the German Federal Cartel Office. The German takeover is part of the three-way deal between AOL, WorldCom Inc and CompuServe parent H&R Block that saw WorldCom take over all of CompuServe and AOL’s network businesses before passing the CompuServe online business to AOL. Under terms of the deal, AOL will expand its partnership with Bertelsmann, which is paying $75m to AOL, with the two companies also investing $25m each in a joint venture to operate CompuServe in Europe. The rationale is that the two services are complementary, as CompuServe targets the small business user, while AOL concentrates on the home consumer and entertainment market. The approval removes the final obstacle for the joint venture to take over the estimated 870,000 new subscribers, as the transaction doesn’t require approval from the European Union. The total subscriber base is now roughly 1.5 million, slightly behind Deutsche Telekom AG’s 1.7 million. On November 10, the $1.2bn total deal received approval from the US Department of Justice (CI No 3,287). The deal should now close during the first quarter of 1998.
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