The merger of Deutsche Telekom and T-Online has been put on hold after a German court rejected it until pending shareholder lawsuits are cleared.
Following several weeks of testimony, the Darmstadt District Court ruled today that the merger between T-Online and its parent company Deutsche Telekom must wait until shareholders' complaints are resolved.
Last year, Deutsche Telekom mounted a €3 billion effort to re-absorb the 26 percent of T-Online it didn't already own. But the Bonn-based operator has been unable to complete the merger because of a small group of minority shareholders who claim the offer is too low. More than 25 lawsuits were filed earlier this year.
The move to reintegrate T-Online reflects a trend in the teleco sector to tap the potential of high-speed broadband Internet access and services by reintegrating them into their core fixed-network operations. Deutsche Telekom follows France Telecom, Europe's second largest carrier, which offered to buy out the minority shareholders in its Wanadoo unit.
If the planned merger is completed, T-Online will remain a separate organisation responsible for developing IP services and applications, while T-Com, the fixed-network unit, will focus on network management, integrated platforms and the development of open standards, in addition to providing circuit-switched telephone service.
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