Europe's internet-oriented merger frenzy is showing no signs of slowing down. In the latest deal, French defence and media conglomerate Lagardere is merging its internet service provider (ISP), Club Internet - which has 380,000 subscribers - with Deutsche Telekom's T-Online, which with 4.3 million subscribers is Europe's largest ISP.
Following a share swap, which values Lagardere at $376m (FFR2.5bn), the German telco will own 99.9% of Club Internet, while Lagardere will hold 6.5% of T-Online.
The move follows Lagardere's announcement earlier in the week that it is creating a new unit - Lagardere.net - to market all of its internet content assets.
It also mirrors moves by French utilities and media giant Vivendi to create an internet unit - VivendiNet - with its pay-TV entity Canal Plus. Vivendi is also launching a multi-entry portal, dubbed MAP, through an alliance with Vodafone AirTouch/Mannesmann.
Although Lagardere has stated that it has not signed an exclusive content deal with T-Online, the alliance with Deutsche Telekom - which in turn is planning an alliance with Germany's KirchGroup - will pit Lagardere against its 'ally' Canal Plus. The two companies have previously signed a deal which sees Lagardere buying into Canal Plus' French digital platform CanalSatellite and themed channel operation MultiThematiques.