United Internet is increasing its stake in its subsidiary 1&1 by subscribing to a 20 percent capital increase while waiving 850 million euros in debt. The transaction lifts the parent company’s ownership to 89.3 percent, up from 87.2 percent, providing the mobile network operator with increased equity capital and financial leeway for ongoing network expansion, ntv.de reported.
Debt-for-Equity Swap Simplifies Group Finances
The capital increase involves 35.4 million new shares. Each share is valued at 24.05 euros, matching the closing price of the 1&1 stock from the previous Friday. This brings the total transaction value to approximately 850.3 million euros.
That exact sum matches an amount United Internet previously lent to Versatel, a former 1&1 subsidiary. Converting this loan into 1&1 shares eliminates the debt while streamlining internal financial structures within the corporate group.
Network Expansion Drives Fourth Operator Strategy
The financial restructuring directly supports 1&1’s ongoing capital-intensive rollout of its own cellular infrastructure. The company established itself as Germany’s fourth independent network operator through this infrastructure deployment.
By boosting its equity ratio through the debt conversion, 1&1 gains stronger balance sheet metrics. Both companies confirmed that the added financial flexibility is earmarked specifically for the continued rollout of the mobile network.
Consolidating Its Stake in 1&1
The parent company has actively consolidated its position in the subsidiary over recent reporting cycles. Prior to the capital increase, United Internet used open-market purchases to boost its stake by 1.3 million shares.
Additional acquisitions remain on the horizon. Up to 4.7 million more 1&1 shares could be acquired by the parent company through mid-2027.
