AOL Time Warner Inc. has made an offer to merge the cable-TV division of AT&T Corp. with its own cable-TV operations, according to a report published Saturday. A merger between AOL's cable unit and AT&T Broadband would create the largest high-speed cable provider in the U.S. with 40 percent of the country's high-speed cable market.
AOL's proposal would merge AT&T Broadband Inc. with Time Warner Entertainment, an existing partnership between AOL and AT&T, said a report by the Wall Street Journal. The deal would give AT&T shareholders a 60 percent stake in the combined venture, it said.
AOL's Time Warner Cable unit has 12.7 million analog cable TV subscribers and, as of the end of 2000, 946,000 high-speed Internet customers, the company said. AT&T Broadband claims a cable subscriber base of over 14 million. As of June 30, the division had 848,000 telephony customers, 1.3 million high-speed data customers and 3.1 million digital cable TV customers.
AOL's reported bid for AT&T Broadband follows a bid by Comcast Corp., which had been in buyout talks for the broadband business. After Comcast's US$58 billion offer was rejected by AT&T's board in July, Comcast reportedly entered talks with AOL, Microsoft Corp. and The Walt Disney Co. in a continuing effort to acquire the broadband unit, according to a report published Tuesday.