Time Warner has agreed to sell AOL Germany's Internet access business to Telecom Italia for 675 million euros ($856 million), giving the Milan company a firm foothold in the German market, an Associated Press report said.
The report said the all-cash deal, which was subject to regulatory approval, was expected to close in early 2007.
Once complete, it would make Milan-based Telecom Italia the second-biggest provider of broadband Internet in Germany with 3.2 million customers, behind T-Online International, part of Deutsche Telekom, the report said.
The deal would bring to more than 9 million the number of Telecom Italia subscribers in Italy, France and Germany, the report also said.
AOL Germany had 1.1 million broadband users and 1.3 million subscribers who used dial-up or ISDN to access the Internet, the report said.
The decision was expected after AOL said in August that it planned to cut 5,000 jobs, or a quarter of its global workforce, as it restructured its business to draw more advertising revenue, the report said.
Under the deal, AOL would offer its co-branded services on a joint Web portal for Telecom Italia users and would design, host and operate audience services for Telecom Italia customers in Germany, the report further said.