Excite to merge international activities with Chello

Excite@Home said it plans to merge its international operations with European internet service provider Chello Broadband, creating what the companies say will be the largest broadband company outside of North America.

To be called Excite Chello, the new company will operate in 15 countries in Europe, Asia, Latin America and Australia. At its formation, it will serve more than 300,000 broadband subscribers and receive more than 8 million unique portal users each month, the companies said in a statement issued on Tuesday.

Chello is a subsidiary of international cable operator United Pan-Europe Communications (UPC).

"It does, in a single stroke, change the internet broadband landscape outside the US. There's no question about that," said George Bell, chairman and CEO of Excite@Home, during a conference call for the press yesterday.

The Excite brand will be the consumer media unit for all Excite Chello portal services, and the Chello brand will be the new company's broadband access service. The two companies will also marry their television device and platform strategies, combining Excite@Home's set-top platform technologies with Chello's exclusive right to roll out television set-top box services to current UPC customers.

Liberty Media -- the cable television unit of AT&T -- will invest $US187 million (200 million euros) in the new company in the form of a note convertible into Excite Cello shares. In addition, Excite@Home and UnitedGlobalCom, the parent company of UPC, have committed to invest $93.8 million dollars (100 million Euros) each in Excite Chello.

The new company will be equally owned and jointly controlled by Excite@Home and the United Group.

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