FRANKFURT (Reuters) – Deutsche Telekom (DTEGn.DE) will become Germany’s No. 2 player in webhosting products by buying freenet’s (FNTGn.DE) Strato unit for 275 million euros ($412 million) in cash.
“Strato complements our activities in the hosting area perfectly and will make a positive contribution to net profit and free cash flow from the very first day of consolidation,” Deutsche Telekom board member Niek Jan van Damme said in a statement on Thursday.
A source close to the sales process had told Reuters in June that freenet was hoping to fetch 300-400 million euros for the division, which employs around 500 staff.
Deutsche Telekom beat out other bidders, which according to sources had included private equity company Bridgepoint Capital Ltd and one other strategic investor at the end of October.
Shares of Deutsche Telekom were up 0.2 percent at 9.70 euros by 0811 GMT, while freenet was down 1 percent at 9.61 euros. (Reporting by Maria Sheahan, Editing by Michael Shields)