Deutsche Telecom is believed to be sniffing around AOL for a minority stake.
Deutsche Telecom has made no secret of the fact that it is looking for opportunities to expand further into Europe. AOL Europe, which is a joint venture between America Online and media giant Bertlesmann, would be an obvious target, according to industry watchers.
AOL, whilst taking part in the planned privitisation of the telecommunications cable network, could also secure itself plenty of room to expand its services via Deutsche Telecom’s lines.
Both Deutsche Telecom and AOL declined to comment: “We do not comment on speculation or industry rumours,” a US spokesperson for AOL said.
Asked if AOL could confirm recent meetings between Deutsche Telecom’s chief executive Ron Sommer and AOL’s chief executive Steve Case, AOL’s spokesperson said, “We have nothing to say on the subject”.
Deutsche Telecom will have to open its wallet wide if it is considering buying into AOL Europe. Analysts estimate that a 10 per cent share would set the telecoms company back $13 billion to 14 billion based on current Internet stock valuations.
If such a deal were to be taken up Deutsche Telecom would have go through cartel talks with the German government as Deutsche Telecom is the country’s number one Internet provider with T-Online. AOL Germany holds number two position.
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