After GVT bid, Telefonica to acqire HanseNet for $1.34 billion

Quick on the heels of nearly prising Brazil's GVT from French rival Vivendi's grasp, Spain's Telefonica SA, one of the world's largest telecom companies, is continuing its acquisition race for global telecom assets: it yesterday reached an agreement with Telecom Italia SpA to buy its wholly-owned German subsidiary, HanseNet for €900 million ($1.34 billion) in an all-cash deal.

Through the acquisition, Telefonica aims to expand its footing in the German telecommunications market by becoming the third-largest integrated service provider in the country with substantial increase in internet broadband services.

The news came just one day after Telelfonica raised its takeover bid for GVT, Brazil's fixed-line and broadband operator to $4 billion. (See: Telefonica eclipses Vivendi's bid for Brazil's GVT with $4 billion offer)

On closing of the transaction, Telefonica O2 Germany will have 15 million mobile and around 2.4 million broadband customers. HanseNet currently has about 2.2 million broadband clients, while Telefonica has a thin 253,000 broadband users.

Hamburg-based HanseNet is the fourth-largest telecommunication company in Germany. The company operates under the brand name 'Alice' and reported revenue of €1.19 billion in 2008. HanseNet was acquired by Telecom Italia, Italy's largest telecommunication company, in 2003.

Telefonica Europe chairman and CEO Matthew Key said: ''As one of the leading DSL-providers in Germany, HanseNet is a perfect match for O2. Both companies are defined by a challenger spirit and have proven success stories in their fields.''

''The arrival of HanseNet to the Telefónica family would be a huge step forward as an integrated European telecommunication provider. This agreement underlines our clear commitment to the German market,'' Key added.