Germany-based telecoms and internet group 1&1 AG has agreed to acquire 1&1 Versatel GmbH from parent company United Internet Management Holding SE in an intra-group deal valued at €1.3 billion ($1.5 billion). The transaction will see 1&1 AG take over all Versatel shares, consolidating control of one of Germany’s largest fiber network operators under its listed telecoms arm.
According to 1&1, the company’s supervisory board has approved the share purchase agreement. The deal encompasses all of Versatel’s assets and liabilities, including extensive network infrastructure and a loan obligation of around €950 million ($1.09 billion) owed to United Internet.
The agreement also includes a performance-based adjustment mechanism: depending on the financial results of fiscal years 2027, 2028 and 2029, the final purchase price may increase or decrease by up to €300 million ($345 million).
Data Center Capacity
Versatel is a critical infrastructure provider within the 1&1 Group. It operates one of the largest fiber networks in Germany, spanning approximately 67,000 kilometers and covering more than 350 cities. The company underpins a broad range of services, running 1&1’s IPTV and VoIP platforms and supplying the broadband access lines marketed by 1&1, in cooperation with municipal fiber operators and Deutsche Telekom.
Beyond access, Versatel also delivers data center capacity that is central to 1&1’s network strategy: four core data centers, 24 edge data centers and more than 300 far-edge sites. These facilities support the operation and continued expansion of the 1&1 mobile network, including latency-sensitive and cloud-centric services.
The agreement follows Versatel’s earlier expansion through the acquisition of BT Group’s German fiber assets, including a 1,590-kilometer network in Düsseldorf, Frankfurt, Munich and Stuttgart. By fully integrating Versatel, 1&1 aims to secure end-to-end infrastructure for both fixed-line and mobile offerings, reducing reliance on third-party networks and creating a more vertically integrated platform for future services.
Executive Insights FAQ
Why is 1&1 AG acquiring Versatel now?
The deal aligns infrastructure, services, and financing structures under 1&1 AG, giving the operator tighter control over its fiber and data center assets as it scales converged fixed-mobile services and its own mobile network.
What does this mean for enterprise and wholesale customers?
Enterprises that rely on 1&1 for connectivity, VPNs, or cloud access could benefit from a more integrated infrastructure stack, potentially improving service quality, routing control, and the ability to offer customized SLAs over owned fiber rather than largely leased capacity.
How significant is Versatel’s network footprint in Germany?
With roughly 67,000 kilometers of fiber across more than 350 cities, Versatel is positioned as a major alternative infrastructure provider, particularly attractive for business connectivity, backhaul, and data center interconnect use cases.
How might the performance-based price adjustment affect strategy?
Because the purchase price can move by up to €300 million based on results in 2027–2029, 1&1 has a clear financial incentive to optimize Versatel’s profitability and growth, including upselling services and improving network utilization during that period.
Does this reduce 1&1’s dependence on incumbents like Deutsche Telekom?
Yes, owning Versatel’s fiber and data center assets allows 1&1 to shift more traffic onto its own infrastructure over time, while still using partners where needed. For B2B customers, that can translate into more diversified routing options and reduced single-vendor dependency risk.
