Deutsche Telekom moving into Mediterranean

Deutsche Telekom subsidiary T-Online is to purchase Spanish portal Ya.com from parent company Jazztel, a leading Spanish telecommunications service.

The companies confirmed the deal, valued at E550m (£337m), this morning. Deutsche Telekom, which has long tried to enter the Mediterranean market, will pay Jazztel E100m (£61m) in cash, and the remainder in stock swaps.

The sale will include Terravista.pt, a Portuguese portal fully owned by Ya.com.

Deutsche Telekom first tried to enter the Spanish market with a bid, in partnership with Jazztel, for next-generation mobile phone licenses. The bid was refused in March, but it won a license for wireless broadband services.

T-Online, Germany's largest ISP, has a fast-growing user-base across Austria and France. The pan-European link-up is likely to be finalised at the end of September, when the share exchange is scheduled to take place.