Takeover of Versatel: United Internet Bundles Networks at 1&1

United Internet is merging its network infrastructures into a single company. 1&1 AG, which is currently building the fourth mobile network in Germany, is taking over its fixed-line sister 1&1 Versatel from the parent company. In return, 1&1 is acquiring all shares of United Internet Management Holding SE, which is the sole shareholder of Versatel. The purchase price amounts to around 1.3 billion euros, the company announced on Friday evening.

Internal Sale

1&1 is thus taking over all assets, network infrastructure, and debts of Versatel, including loans from the parent company amounting to around 950 million euros. According to the information, claims of 1&1 against United Internet and a loan granted by United Internet will be offset in the purchase. The transaction "does not currently lead to a liquidity outflow" at 1&1.

Versatel operates a fiber optic network for business customers in around 350 cities, which plays a significant role as a transport network for the construction of 1&1's mobile network. 1&1 also relies on Versatel's infrastructure for its fixed-line offerings. With the internal sale, United Internet is bundling its network infrastructure in one company.

Fuel for Speculation

The intra-group deal is also likely to give new impetus to speculation about a possible consolidation of the industry. With fixed-line and mobile networks in one package, 1&1 becomes an interesting candidate for acquisition by a competitor. However, no concrete plans are known.

Most recently, the Handelsblatt reported on efforts by Telefónica Deutschland to normalize the strained relations with 1&1 after their switch to Vodafone. For the Spanish parent company, an acquisition is also conceivable in the medium term.

Telefónica has a new CEO since the beginning of the year, who has also reorganized the management of the German subsidiary. Long-time CEO Markus Haas has to leave and will hand over to Santiago Argelich Hesse at the turn of the year.

(vbr)