AOL Sells CD and DVD Merchandising Businesses for $1.05 Billion
An attempt to pare down AOL Time Warner's staggering debt, the deal is valued at $1.05 billion in cash. It is also an effort to streamline Warner Music Group in a rapidly changing music business.
"With this agreement, as well as our legal settlement with Microsoft and the sale of our interests in Comedy Central and GM Hughes, we have announced this year transactions generating nearly $3.8 billion in cash proceeds earmarked for debt reduction," AOL Time Warner chairman/CEO Dick Parsons said in a statement.
Cinram is an independent manufacturer and distributor of pre-recorded VHS videotapes, audio cassettes, music CDs, CD-ROMs and DVDs for movie studios, record labels, computer software publishers and publishers.
The sale includes WEA Manufacturing Inc., Warner Music Manufacturing Europe GmbH, Giant Merchandising, Ivy Hill Corp. and the physical distribution operations of Warner-Elektra-Atlantic Corp.
The sales and marketing operations of Warner-Elektra-Atlantic Corp. will remain part of Warner Music Group.
In a long-term agreement, Cinram will serve as the manufacturer, printer, packager and physical distributor of DVDs and CDs from Warner Music Group, Warner Home Video and New Line Cinema.