19 July 2000

Californian-based ISP Excite@Home is to merge its non-US assets with those of Chello Broadband of the Netherlands in a £5billion deal creating the largest cable-based ISP outside North America with 300,000 broadband subscribers.

Chello's parent, United Pan-Europe Communications, and Excite will each hold a 43% stake in the joint venture, with management and employees taking a further ten per cent and Liberty Media the residual 4%. Liberty will contribute the lion's share of working capital with a $200m investment, while Excite and UPEC each contribute $100m.

Branded Excite Chello, the new venture will meld Chello’s network in Europe, Latin America, Australia and New Zealand with Excite's businesses in several European countries as well as Australia, Japan and China.

According to Roger Lynch, the joint venture's chief executive (and former ceo of Chello), the deal significantly changes the global Internet landscape and enhances Excite's position in Europe. It also gives Chello "a much stronger platform to monetize subscribers through advertisement and e-commerce."

News source: Wall Street Journal