FRANKFURT (AFP) - Germany's Deutsche Telekom is to reintegrate its Internet arm T-Online, Europe's largest Internet provider, via a swap for Telekom shares and a share buyback offer, the company said.
In a statement, Deutsche Telekom said its supervisory board had approved a merger plan by the management board, under which shareholders will receive Deutsche Telekom shares in exchange for their T-Online stakes.
For shareholders who would rather sell their shares, "Deutsche Telekom will make a voluntary cash offer to buy back T-Online shares at a price of 8.99 euros per share," it said, reflecting the closing price per share on Friday.
The swap will take place at a ratio yet to be determined. But Deutsche Telekom has already warned T-Online stock holders they will receive less shares than the current price ratio between T-Online's 8.99 euros per share and Deutsche Telekom's Friday closing price of 15.22 euros.
Deutsche Telekom -- which holds 73.93 percent of the company, with 5.69 percent in the hands of the French group Lagardere and the rest in free float -- is now following the same path as France Telecom did with its Internet subsidiary Wanadoo.
Deutsche Telekom said it expects the reintegration to be complete in the course of 2005.