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Deutsche Telekom to buy Strato for €275m
20 November 2009
Deutsche Telekom is to buy rival operator Freenet’s web-hosting operation for €275 million, as shareholders in the German incumbent approve a move to merge fixed and mobile operations
Read more:
[Deutsche Telekom]
[Strato]
[Freenet]
[T-Mobile]
[T-Home]
[Germany]
Comment: It’s significant that Deutsche Telekom — Europe’s biggest incumbent operator — is starting to buy businesses again. The Strato deal strengthens its position in its home market, though we still await developments outside Germany.
Deutsche Telekom will buy Strato, a web-hosting unit belonging to mobile operator Freenet, for €275 million in cash.
The acquisition will improve Deutsche Telekom’s position in the growth market of hosting solutions.
Freenet is a rival mobile-phone and internet service provider in Germany. It put the unit up for sale in early July 2009. The sale of Strato and other non-core units should reduce its existing debt.
The deal, which has been approved by the company’s supervisory boards, awaits approval from Germany’s cartel office. The acquisition is expected to close by the end of 2009.
Bridgepoint Capital and one other strategic investor had also placed a bid for the company in October.
Strato deals in email, web sites, blogs, online shops and data-storage services on physical and virtual servers.
The announcement came on the day shareholders in Deutsche Telekom, headed by René Obermann, approved a move to merge T-Home and T-Mobile operations in Germany.
“Two healthy, competitive business areas will become even stronger by joining forces,” said Obermann. “This will put Deutsche Telekom in a better position to offer integrated solutions and services for fixed network and mobile communications from a single source.”
The company said that the planned merger will make Deutsche Telekom more competitive in its domestic business compared to other globally structured telecommunications companies that offer integrated fixed-network and mobile solutions. Within the group the Hungarian company Magyar Telekom already operates as an integrated provider. GTB
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