AOL and Time Warner agree to merge

In a move that combines the entertainment and information content of CNN, HBO, TNT, Warner Brothers and Sports Illustrated with Internet acccess to an estimated 25 million subscribers, AOL and Time Warner have agreed to a merger.

The combined yearly revenue of the company would exceed $30 billion. Pending shareholder and regulatory approval, when the dust settles AOL shareholders will have a 55% stake in the combined company. Each Time Warner share will be worth 1.5 shares of the old AOL.

The companies will have a combined market value of $350 billion with revenues of $30 billion a year.

In overseas trading, both company’s shares were up sharply on the news.

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