February 23, 2007 / 6:45 AM / 12 years ago

Blockbuster to sell Australian business to Video Ezy

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LOS ANGELES, Feb 22 (Reuters) - Blockbuster Inc. BBI.N said on Thursday it has agreed to sell its Australian subsidiary and grant master franchise rights to rental chain Video Ezy as part of a plan to divest its foreign operations.

Video Ezy has applied to the Australian Competition and Consumer Commission for clearance and expects a decision in the near future, Blockbuster said in a statement.

Blockbuster, the No. 1 U.S. video rental chain, did not disclose financial terms of the deal.

Blockbuster has 29 company-operated stores and 341 franchises in Australia. It has been gradually moving away from company-owned to franchised operations.

If the deal gets regulatory approval, the stores in Australia would continue to operate under the Blockbuster brand.

Blockbuster has been selling and closing its international and non-video rental operations over the past year. The company has said it wants to concentrate on its businesses in North American, where it faces competition from Netflix Inc. (NFLX.O) and online movie downloading services.

It sold its Taiwan subsidiary and master franchise license to Webs-TV and its 72-store Rhino Video Game chain to GameStop Corp. It also signed a 20-year licensing agreement with Brazilian retailer Lojas Americanas.

((Reporting by Gina Keating, editing by Toni Reinhold; Reuters Messaging: gina.keating.reuters.com@reuters.net; +1 213 955 6776)) Keywords: BLOCKBUSTER/AUSTRALIA

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