United Internet Increases Stake in Wireless Rival Drillisch

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United Internet CEO Ralph Dommermuth
United Internet Chief Executive Officer Ralph Dommermuth has been expanding the company into new fields through acquisitions. Photographer: Boris Roessler/picture-alliance/DPA/AP Images

United Internet AG, a German provider of Internet services and website-making tools, said it secured an additional 9.1 percent stake in Drillisch AG to take advantage of the wireless operator’s growth.

The purchase, if approved by regulators, would take United Internet’s stake to 20.7 percent, making it Maintal, Germany-based Drillisch’s largest shareholder, the company said in a statement Monday. United Internet doesn’t currently plan to boost its shareholding to 30 percent or more to avoid having to make a mandatory takeover offer, it said.

Drillisch fell 0.5 percent to 43.25 euros at 9:09 a.m. in Frankfurt, following an 8.5 percent increase on Monday. The stake is worth about 480 million euros ($520 million). United Internet traded 0.3 percent lower.

The deal comes in the wake of consolidation in the German mobile-phone market, which is providing an opening for smaller players to grab a larger share of the market. Telefonica SA’s German unit agreed last year to let Drillisch use as much as 30 percent of its network capacity in order to gain approval for its acquisition of wireless rival E-Plus.

United Internet will be a “strategic” shareholder in Drillisch because it “fits well” with its own Internet and phone-access business, according to the statement.

Representatives for both companies didn’t immediately return calls seeking comment.

Both United Internet and Drillisch offer wireless service to customers via the networks of the larger network operators in Germany, where Deutsche Telekom AG, Vodafone Group Plc and Telefonica lead the market.

United Internet Chief Executive Officer Ralph Dommermuth has been expanding the company into new fields through acquisitions. The company took full control of fiber-optics network operator Versatel AG last year and acquired a stake in startup factory Rocket Internet AG.

Drillisch, led by brothers Paschalis and Vlasios Choulidis, acquired the Yourfone brand from E-Plus in January and this month agreed to buy the German unit of The Phone House from Dixons Carphone Plc.

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