AOL sells disc-making business for $1bn

AOL Time Warner has reached an agreement to sell its DVD and CD manufacturing and distribution businesses to Canadian company,...

AOL Time Warner has reached an agreement to sell its DVD and CD manufacturing and distribution businesses to Canadian company Cinram International for about $1.05bn (£661m) in cash.

The deal is expected to go through later this year, pending regulatory reviews in the US and other countries, said an AOL spokeswoman.

As part of the deal, Cinram will have an exclusive agreement to manufacture, print and distribute CDs and DVDs for AOL's Warner Home Video, Warner Music and New Line Cinema in North America and Europe.

The agreement includes the sale of several AOL businesses: WEA  Manufacturing, Warner Music Manufacturing Europe, Ivy Hill, Giant Merchandising and the physical distribution operations of Warner-Elektra-Atlantic (WEA). The sales and marketing operations of WEA will remain as a part of Warner Music Group.

The deal demonstrates progress in AOL's goal of reducing its debt, said Richard Parsons, AOL Time Warner's chairman and chief executive officer.

Roger Ames, Warner Music Group's chairman and chief executive officer, called Cinram a "well-managed, international company that not only recognises the tremendous value of these assets, but has demonstrated a commitment to quality and service."

Grant Gross writes for IDG News Service

 

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