AOL Time Warner on Tuesday said that it paid $812.5 million in cash to purchase troubled French conglomerate Vivendi Universal's stake in its AOL Europe venture. About two years ago,exchanged its 55 percent interest in AOL France for nonvoting preferred shares in AOL Europe that were to be repurchased in April 2003.
The transaction does little to help AOL reduce its $27 billion debt load, which CEO Dick Parsons has promised to cut to $20 billion by 2004. Still, management said that it felt paying cash offered the best way out of the deal given AOL's depressed stock price. "Although this transaction will increase our net debt, we remain fully committed to achieving our previously stated debt-reduction targets," Parsons said in a statement.