Microsoft has just splashed out over a $1 billion to purchase patents from AOL. The deal
worth $1.056 billion will be sealed by the end of 2012 and AOL will
exchange 300 patents to Microsoft who will be able to use them under a
non-exclusive license.
The
patents and patent applications relate to advertising, content
generation,
content management, multimedia and security. Tim Armstrong,
AOL’s Chairman and CEO explains:
“We continue to hold a
valuable patent portfolio as highlighted by the license we entered into
with Microsoft. The combined sale and licensing arrangement unlocks
current dollar value for our shareholders and enables AOL to continue to
aggressively execute on our strategy to create long-term shareholder
value.”
AOL is expected to sell stock from one of the
subsidiaries as part of the transaction; resulting in taxes connected
with the sale being rendered immaterial.
AOL is also planning to
utilise approximately $40 million of existing deferred tax asset to
offset charges related to its remaining patent portfolio, as well as
forward a ’significant’ amount of the proceeds to AOL shareholders.
