AOL Time Warner has reached an agreement to sell its DVD and CD manufacturing and distribution businesses to a Canadian company, Cinram International, for about $US1.05 billion in cash.
The two companies expect the deal to go through late this year, pending regulatory reviews in the US and other countries, an AOL spokeswoman said.
As part of the deal, Cinram would 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 spokeswoman said.
The agreement includes the sale of several AOL businesses: WEA Manufacturing, Warner Music Manufacturing Europe GmbH, 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.
A spokesman for Cinram was not available for comment.
The deal demonstratedprogress in AOL's goal of reducing its debt, s AOL Time Warner's chairman and chief executive officer, Richard Parsons, said.
Warner Music Group's chairman and CEO, Roger Ames, 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."
