advantage of new technologies. As a result, AOL Time Warner will be able to
extend the growth of America Online's and Time Warner's existing assets and
to develop whole new businesses.
Q. What conditions are there to closing the deal?
A. The principal conditions include federal and foreign regulatory approvals
and local regulatory approvals for the transfer of Time Warner cable
systems as well as approvals of Time Warner's and AOL's stockholders.
Q. Do you foresee any regulatory problems?
A. AOL Time Warner doesn't involve the sort of concentration that invites
government attention. The Internet can never be controlled by one or two
companies, the way television once was. This is the first truly limitless
medium in history. Our merger isn't a case of one media company buying
another in order to dominate a market. Time Warner doesn't anticipate
Q. What percentage of the combined company will the respective shareholders of
each company own?
A. When complete, America Online's shareholders will own approximately 55% and
Time Warner's shareholders will own approximately 45% of the new company.
Q. What are the exchange ratios?
A. Under the terms of a definitive merger agreement approved by each company's
board of directors, Time Warner and America Online stock will be converted
to AOL Time Warner stock at fixed exchange ratios. The Time Warner
shareholders will receive 1.5 shares of AOL Time Warner common stock for
each share of Time Warner common stock they own. America Online
shareholders will receive one share of AOL Time Warner common stock for
each share of America Online common stock they own.
Holders of each series of Time Warner convertible preferred stock will
receive one share o a substantially similar series of AOL Time Warner
convertible preferred stock for each share of Time Warner convertible
preferred stock they own.