European high-speed internet provider Chello Broadband is in merger talks with US net company [email protected] about a possible merger, according to a report today.
The merger of Excite's international operations and Chello would create a combined business valued at an estimated 6bn euros (£3.7bn), said the Financial Times.
Chello announced yesterday that it is delaying its planned initial public offering "until further notice, in light of ongoing strategic discussions". A Chello spokeswoman refused to comment today on the report that the company is holding discussions with Excite. Excite also refused to comment.
Excite is said to be keen to increase its international broadband access, and the deal will offer access to a pan-European network.
Bernt Ostergaard, an analyst at researcher Giga Information Group, said: "There is a lot of movement between content players and access providers. Content companies, like Excite, need to be directly connected to a high-speed partner. Chello is a good player to link with for an expansion into Europe."
The discussions between the companies are said to be at an advanced stage. Other reports have speculated that Chello and its parent company, the European cable operator United Pan-Europe Communications, are also in talks with UK carrier Telewest in a deal that would provide it with access to Telewest's cable TV network.
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