WESTLAKE Village, Calif. — NetZero Inc. and Juno Online Services Inc., the two biggest providers of free Internet access, said Thursday they will merge in a deal that is expected to create the nation’s second-largest Internet connection company.
Under terms of the all-stock deal, NetZero (NZRO) shareholders will receive 0.2 shares of United Online for each NetZero share, and Juno (JWEB) shareholders will receive 0.357 shares of United Online for each Juno share. Juno shareholders will receive 1.785 shares of NetZero for each Juno share.
NetZero shareholders will own about 61.5% of the new company, to be called United Online Inc., and Juno stockholders will own approximately 38.5%.
The deal will make United Online the No. 2 Internet-access provider, behind AOL Time Warner Inc.’s America Online unit, with more than seven million subscribers.
NetZero Chairman and Chief Executive Mark Goldston will become chairman, president and CEO of the new company, and NetZero Chief Financial Officer Charles Hilliard will become United Online’s CFO.
The new company, to trade on the Nasdaq exchange under the symbol UNTD, is expected to take restructuring and other transaction costs of $20 million to $25 million. The deal is expected to be completed before the end of the calendar year.
In 4 p.m. trading on the Nasdaq Stock Market Thursday, Juno shares were down seven cents at $1.48. Nasdaq-listed NetZero shares were up three cents at 95 cents.
Copyright (c) 2001 Dow Jones & Company, Inc.
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