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Morning NewsAOL-Time Warner Merger: Time Warner Stock Opens Sharply HigherAired January 10, 2000 - 9:30 a.m. ETTHIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. KYRA PHILLIPS, CNN ANCHOR: An historic entertainment and information merger is announced today. The parent company of CNN, media giant Time Warner, and leading Internet provider America Online plan to join forces. We are actually going to go to Steve Young right after this. The deal, as you saw right there, the legal battle -- we'll go to Steve Young. Sorry about that. Right now. Steve, take it away. I need some help. STEVE YOUNG, CNN CORRESPONDENT: Good morning. This deal came together just over the weekend. AOL is now trading 73 3/4, which up about a point and a half from its Friday close. Earlier this morning, it was trading in Europe up as much as $14. So as Wall Street has a chance to digest this, it seems to be valuing it as more important to Time Warner than AOL. Time Warner's stock has not yet opened, we are waiting for an opening quote, but the indication was that it was going to be up as much as $26. This deal puts together the number-one on-line company with the number-one media company, and it provides an opportunity for Steve Case's AOL to get into the 13 million homes served by the Time Warner cable system. Time Warner's cable system is second only to AT&T's after AT&T acquired TCI. We are going to hear from the principles of both companies in about 90 minutes. But we are still hearing from them now on a conference call with analysts. The question from the analysts have only begun. But before that section, Gerald Levin, the chairman and CEO of Time Warner, emphasized that it was crucial in the 21st century for all media companies to have an Internet strategy. There have been questions about the acuity of Time Warners. But all of a sudden now, in this deal, Time Warner is aligned with the most successful interactive on-line company in the world. And interestingly, Mr. Levin, on the conference call with analysts, placed a lot of emphasis on music. He said, music, Time Warner Records, will benefit tremendously from the Internet. He said that all handheld devices will have music chips in them. Bob Pittman, the chief operating officer of the new company, said that this will provide great opportunity. He said it will blow the roof off our advertising and commercial potential. Time Warner's stock has now opened in New York at 92, which is roughly $26, $27 higher price than it was trading at on Friday. The Time Warner shareholders are getting one-and-a-half shares of this new entity. The AOL shareholders will only be getting one share of the new entity. However, AOL will own controlling interest, 55 percent to 45 percent. Steve Case, of AOL, will be the chairman of the new company. Gerald Levin of Time Warner will be the CEO and presumably the more active day-to-day executive, but we will have to wait for the news conference to find that out. Back to you. PHILLIPS: Steve, thanks. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com | ||||||||||||||||||||||||||||||||
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