Excite At Home Corp., the No. 1 U.S. high-speed online service provider, will merge its international assets with those of European rival Chello Broadband NV, a person familiar with the transaction said.
Chello was to make an announcement yesterday, said Jim Carlson, a spokesman for UnitedGlobalCom Inc., which controls the owner of Chello. Carlson declined further comment.
This is the second move in the past month for AT&T, which controls Excite, to expand outside the U.S., where it is the No. 1 cable-television and long distance provider. AT&T's Liberty Media, headed by cable pioneer John Malone, agreed on June 26 to merge some international assets with UnitedGlobalCom to get more TV and Internet customers in Latin America and Europe.
"Broadband is not developed in Europe the way it is in the United States,'' said Mark Greenberg, manager of the Leisure Fund at Invesco Funds Group Inc., which owns shares of UnitedGlobalCom and Liberty. "There are more opportunities for people to come in with strong product offerings.''
Chello and Redwood City, California-based Excite sell high-speed online service over cable-TV lines, helping cable operators sell so-called broadband packages of Internet, telephone and TV service over one connection. The merged companies will be called Excite Chello, and get an investment from Liberty.
Excite Chello may have an initial stock sale this year, after Chello had twice delayed its offering, which would have been worth as much as $5 billion, the person said. Malone, whose Liberty Media has more than $50 billion invested in publicly-traded companies, will also finance Excite Chello, to help introduce service in more countries.
Liberty will invest 200 million euros ($187 million) in Excite Chello, the person familiar with the plans said. Excite and UPC will each invest 100 million euros in the new company, which could sell stock this year or next. Reuters
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