Time Warner in $688 Million Deal to Sell U.K. AOL Unit

NEW YORK/LONDON, October 11: Time Warner will sell its AOL
Internet business in the U.K. for $688 million to mobile phone retailer Carphone
Warehouse Group, according to reports.

Carphone operates the MViva mobile Internet portal. The deal
gives the company a broadband customer base of about 2 million customers,
vaulting it to third place among U.K. broadband service providers. AOL will
continue to manage online advertising sales for the service and will share in
those revenues.

"This agreement completes the restructuring of our AOL
Europe businesses," said Time Warner CEO Richard Parsons. Added Carphone
Warehouse CEO Charles Dunstone, "This deal gives us significant scale to
complement the rapid organic growth of our free broadband proposition."

The European Union competition authority must approve the
deal, which is set to close on December 31.

AOL’s Carphone deal follows an announcement that Neuf
Cegetel, the French telecommunications network operator, plans to sell an 18.5-percent
stake in its business in order to raise around $957 million to fund its
acquisition of AOL’s French Internet access business. Time Warner will also
sell AOL Germany’s Internet business to Telecom Italia for $870 million.