Feds still reviewing AOL-Netscape deal
Federal review of America Online's proposed $4.2 billion buyout of Netscape Communications has been extended for nearly two weeks, sources say.
In a prospectus filed with the Securities and Exchange Commission last
month, AOL said it expected the "applicable waiting periods" from the Justice Department for reviewing the deal to expire on February 28. But sources said Netscape and AOL have agreed to extend the waiting period until March 12, without explanation.
AOL declined comment on any extension. "We will close sometime after the Netscape shareholders' meeting, which is currently set for March 17," said AOL spokeswoman Tricia Primrose. She wouldn't elaborate.
The Hart-Scott Rodino Act of 1976 requires an initial waiting period during which parties cannot complete their transaction, said Howard Morse, a partner at the Washington office of law firm Drinker Biddle & Reath. At the end of this period, the regulatory agency may ask for additional documentation material or further information before approving or striking down a merger.
The DOJ said only that the merger is still under review.
"Parties often agree to an extension of time at the end of the waiting period to have meetings with senior officials at the DOJ," said Morse. "The extension could also mean they are negotiating a consent agreement or it could be simply as a convenience for all the parties."
In the prospectus filed last month, Netscape's board of directors asked shareholders to accept the merger.
Netscape cofounder Marc Andreessen will become AOL's chief technology officer when the deal closes. Netscape chief executive James Barksdale "will join AOL's board of directors, but I have no comments on what else he might do," said Primrose.
Analysts are awaiting the close of the deal, one of the largest Internet mergers to date. AOL's challenges including melding its workforce with Netscape's as well as integrating products and technologies.