AOL to pay AT&T US$9b

NEW YORK : AOL Time Warner Inc. will pay AT&T Corp. as much as US$9 billion in cash and stock, as well as an ownership stake in a new cable company, to unwind a complicated joint venture involving Time Warner Entertainment, according to published reports.

The deal had been anticipated following a decision late last month by the two companies to delay a move toward an initial public offering of stock in Time Warner Entertainment, or TWE. AOL Time Warner owns a little less than three-fourths of TWE, and AT&T owns the rest.

Under the terms of the deal, which was expected to be announced Wednesday, AOL gets full ownership of Warner Bros. film studio and Home Box Office.

In return, AT&T gets about $2 billion in cash, $1.5 billion in AOL Time Warner shares and a 21 percent stake in a newly created Time Warner Cable company, The New York Times and The Wall Street Journal reported late Tuesday on their Web sites.

The deal's value is expected to range from $8.5 billion to $9 billion, based on the current values of cable stocks and AOL shares, the Journal reported. --AP.