Word: mergers
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Necessity mothered the merger of AOL and Time Warner. TIME.com's new $350 billion parent company - AOL Time Warner - was unveiled Monday after the giants of the Internet and of traditional media negotiated the biggest merger in history. Each side had something the other badly needed: Time Warner recognizes that the future of an infotainment company is digital, but its attempts to stake its own claim on Internet real estate - a competitive CNN news site, an innovative Warner Brothers product and the failed Time Warner "Pathfinder" network - were unable to create the dominant presence the corporation enjoys in other media...
Moved PermanentlyMoved PermanentlyFortune Investor Datathough the two corporations' executives stressed the compatibility of their corporate cultures, the match may be discussed for years to come in MBA programs. "This merger has created a really big company," says Saporito, "and the history of big mergers in other industries is that they really don't work very well. So the success of this one is far from guaranteed." The two sides also had to do some bargaining on valuation. In the end, the deal was this: Time Warner shareholders will be given 1.5 shares in the new entity, while AOL's will...
...Time Warner stock spent the early trading going up, up, up (at one point reaching 102 before settling in at around 90-plus), stocks for a number of Internet and media companies, such as Lycos and Disney, also shot up on the news. As the process unfolds, the merger of news and entertainment of the past decade will now be extended to Internet and software companies, as Internet real estate is parceled out among infotainment juggernauts. After all, Time-Life wedded with Warner Brothers and Time-Warner consumed CNN while AOL nabbed Netscape. And now they have each other...
...local services. That means one bill for all five services; consumers will also be allowed to choose the package that fits them. Further, telecom analysts say that the long distance market is in need of some new blood to fuel competition in the wake of the MCI-Sprint merger. Eventually there may be only a handful of major firms offering all these services, but from a consumer choice standpoint we're clearly better off than we were in the days of Ma Bell...
...fever pitch in Europe this year. And lately, American consumers have shown signs of rebelling against products such as Monsanto's modified seeds, which are at the heart of the company's agribusiness. Those inklings of dissent were enough, apparently, to make up executives' minds: They would complete a merger and quickly cut the agribusiness free from the rest of the company, letting it fend for itself. That amputation, execs hope, will leave Monsanto and Pharmacia & Upjohn's pharmaceuticals division to take the market by storm - unhindered by bad publicity...