Carphone Warehouse To Acquire AOL UK For £370 Million

Carphone Warehouse is to buy AOL UK, the UK’s third largest internet provider, for £370 million.

The agreement will see Carphone Warehouse acquire AOL’s customer base in the UK with AOL providing co-branded portal, content and other audience services and managing the online advertising sales for Carphone Warehouse’s combined broadband customer base in a revenue sharing deal.

Charles Dunstone, CEO of Carphone Warehouse, said: “The acquisition of AOL’s UK Internet access business is transformational for our broadband business. This deal gives us significant scale to complement the rapid organic growth of our free broadband proposition.

“In addition, the joint development of AOL’s already successful audience platform will bring us new advertising and content revenues in a proven and low risk manner.”

The purchase of AOL UK comes as Carphone Warehouse releases its second quarter results, with Dunstone saying that the company “now expects to incur start up broadband losses of around £70 million in the current year.”

This is due to high demand for its “free” broadband service which has seen the company spend an additional £20 million on delivering the service.

In July Carphone Warehouse’s TalkTalk was reprimanded by the ASA over its “free” broadband advertising (see TalkTalk Drops “Free” Broadband Price).

AOL announced in August that it planned to sell its internet access businesses in the UK, Germany and France as part of a shift of focus.

Carphone Warehouse: www.cpwplc.com AOL: 01268 530919 www.aol.co.uk