- 1&1 acquisition of Versatel for $1.4 billion will give the company more control over fixed-line and mobile infrastructure and strengthen its B2B segment.
- No cash outflow for 1&1 as the deal will be settled through offsetting cash management claims and a loan from United Internet. The deal’s value could adjust by up to $315 million depending on Versatel’s performance in 2027–2029.
What happened: 1&1 acquires Versatel for $1.4 billion, consolidating fixed-line and mobile operations
1&1 has agreed to acquire Versatel, a leading fibre network provider in Germany, for $1.4 billion. This intra-group acquisition will bring all of Versatel’s assets, including its network infrastructure and debts, under 1&1’s control. The deal allows 1&1 to consolidate its fixed-line and mobile operations, ensuring greater flexibility in the future. Versatel has long provided the network infrastructure for 1&1’s fixed broadband and mobile backhaul, and by bringing it in-house, 1&1 aims to streamline its operations.
The acquisition also includes Versatel’s $1.02 billion loan liability to its parent company, United Internet. Despite the large loan, the deal will not require any immediate cash outflow from 1&1, as it will be settled by offsetting existing cash management claims and through a loan from United Internet. Additionally, the final price could be adjusted by up to $315 million depending on Versatel’s performance over the next few years, with adjustments set to be finalised in 2030.
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Why it’s important
This acquisition is a strategic move for 1&1 to strengthen its position in the German telecom market. Bringing Versatel’s fibre infrastructure in-house gives 1&1 more control over both its fixed-line and mobile services, as well as a stronger business-to-business (B2B) segment.
Over the past decade, Versatel has expanded its network significantly, covering 67,000 km across 350 cities in Germany, up from 37,000 km in 226 cities in 2014. This growth mirrors Germany’s increasing fibre deployment, making the acquisition a timely move for 1&1. The purchase also enhances 1&1’s ability to compete with Germany’s three dominant mobile operators by closing the gap between its fixed and mobile services.
