US internet company AOL Inc said it agreed to buy the Huffington Post news website for $315 million, creating a media group that will have a combined base of 117 million visitors a month in the United States.

AOL said it will pay about $300 million in cash, funded from cash on hand. The company did not specify how it would pay the balance. The move pushed AOL shares up 5 per cent in premarket trade before falling 2.5 per cent in opening trade today.

Arianna Huffington, the co-founder of Huffington Post, will lead the newly-formed The Huffington Post Media Group, AOL said.

Through the acquisition, AOL said it will accelerate its strategy to deliver an array of premium news, analysis, and entertainment.

The new media group will reach 270 million people globally, the company said.

AOL said the boards of each company and shareholders have approved the deal, which is expected to close in the late first, or early second quarter 2011.

Reuters