---
title: "AOL → Time Warner"
url: "https://mahouse.world/ma-deals/aol-buy-time-warner-2000"
type: "M&A deal"
year: "2000"
---

# AOL → Time Warner

The most valuable merger in history at signing became — inside three years — the most destructive. Bought a media empire for stock that would soon be worth almost nothing.

An all-stock merger struck at the peak of the dot-com bubble that led to a $99bn goodwill write-down in 2002.

- **Acquirer:** AOL (United States)
- **Target:** Time Warner (United States)
- **Value:** $165B
- **Announced:** January 2000
- **Completed:** January 2001
- **Sector:** Media
- **Deal type:** merger

## Why it mattered

Steve Case saw the ceiling on dial-up subscribers coming and used AOL's stratospheric stock price as currency to buy the largest content library on earth before it evaporated. Gerald Levin, from the other side, was convinced that Time Warner needed a distribution front-end for the internet age and thought AOL was that front-end.

## The story

Signed on 10 January 2000 — sixty days before the Nasdaq peak. The transaction was structured as a reverse merger, with AOL shareholders receiving 55% of the combined company despite Time Warner being roughly five times larger by every operating metric. Regulatory approval took a full year; by the time the ink was dry on 11 January 2001, AOL's share price had fallen 66% and the strategic logic had gone with it.

## What it left behind

A $99bn goodwill impairment in the 2002 fiscal year — the largest annual loss ever reported by a US public company at the time. The "AOL" prefix was dropped in 2003; the businesses were formally split in 2009. Every senior banker who worked on the deal now uses it in their own pitch decks, on the "why culture matters" slide.

> The single worst business deal ever made.
> — Jeff Bewkes, Time Warner CEO, on the merger, 2010

## At a glance

- **Structure:** Reverse merger, all-stock (AOL shareholders got 55%)
- **Announced:** 10 Jan 2000
- **Completed:** 11 Jan 2001
- **Regulatory review:** FCC, FTC, EU Commission
- **Peak combined market cap:** ~$350B
- **Goodwill write-down (2002):** $99B
- **Formal split:** 2009
- **Rank among value-destroying deals:** #1 all-time