I=10
United Internet and 1&1 shares shed more than 6% on report that Telefonica is freezing plans for acquisition of 1&1
- Telefonica freezes plans for acquisition of 1&1 until the German operator resolves its OPEN RAN problems, OKDIARIO reported citing internal sources.
- United Internet shares shed as high as 10% while 1&1 shares lost 7.6% immediately following the report.
- The sources said while Telefonica’s strategic interest in 1&1 remains unchanged, any corporate action will depend on 1&1 successfully completing the most critical phase of its network development such as regulatory deadlines.
Assessment
My first assessment is that Telefonica is using delaying tactics with the hope of getting a good offer price. This is because there are no longer regulatory deadlines following the court ruling which voided the 2019 expansion targets. Also, according to 1&1, it has met its 2025 coverage obligations since it’s using more powerful antennas. The only major headwind currently facing 1&1 is the lack of low-band frequencies, but Telefonica already has them.
Additionally, Telefonica is waiting for clarity on merger guidelines, whose real-world impact is not expected until at least early 2027 (Q4 2025 United Internet Earnings (Notion)). This gives them some time to drag their feet.