United Internet gets green light for freenet deal

Germany’s Federal Cartel Office (FCO) has approved ISP United Internet’s takeover of the DSL unit of multi-service operator (MSO) freenet without imposing restrictions, reports manager-magazin citing an unnamed source at the FCO. According to TeleGeography’s CommsUpdate, United Internet announced it had agreed to buy the DSL business of freenet for around EUR123 million (USD172.3 million) at the end of May 2009. The ISP said it will pay EUR70 million in cash and transfer 4.58 million of its own shares to freenet; if the price of United Internet shares falls below EUR12 at the time that freenet’s DSL contracts are migrated, the company will pay compensation of up to EUR4 per share. It is estimated that at the point of technical migration, 700,000 DSL contracts will be transferred to United Internet by the end of the year.