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Lagardère and Deutsche Telekom form strategic alliance : Club-Internet and T-Online International merge



Paris, february 16th, 2000

  • T-Online International merges with Club-Internet in the form of shares.
  • Lagardère to become second largest shareholder of T-Online International with 6.5% of share capital (prior to planned IPO in mid-April, 2000). Lagardère to be granted membership on T-Online International’s Supervisory Board.
  • T-Online International and Lagardère to share equal membership on both Supervisory and Management boards of Club-Internet’s portal subsidiary.
  • Lagardère to remain Club-Internet’s portal manager for an initial period of 3 years.
  • T-Online International and Lagardère to contemplate broader Internet co-operation regarding portal management, content providing and advertising services on a world-wide basis (subject to existing agreements).

Deutsche Telekom AG and Lagardère SCA today announced the formation of a partnership between their respective Internet Service Providers, T-Online and Club-Internet.

The transaction brings together Germany’s leading internet service provider—with more than 4.2 million subscribers—and the second French internet service provider —with more than 320, 000 subscribers—into European’s leading internet service provider.

The transaction’s key benefits will be :

  • To allow T-Online International to enter the French market via Club-Internet, n°2 Internet service provider in France, n°3 French portal and one of the best recognized brands, with the objective to enhance Club-Internet’s market share in France during the coming years.
  • To enable Lagardère to increase significantly the audience of its e-commerce web sites, by becoming a prominent editorial/e-commerce provider to the leading internet service provider in Europe, with more than 4.5 million subscribers.
  • To combine T-Online International and Lagardère outstanding capabilities in internet access and editorial/e-commerce management to support an ambitious international expansion strategy primarily focused on the European market.

The two companies believe they are ideally suited to build up a successful partnership based on the complementarity of T-Online’s International Internet access capabilities with Lagardère’s current and future sites. This unique combination of assets will allow both groups to fuel their dramatic growth in the Internet business:

  • T-Online will benefit from a strong position on the French Internet market, which experiences one of the fastest growth in Europe at a rate expected to reach as much as 60% per year until 2003.
  • Lagardère will become a prominent content provider to Europe’s leading Internet Service Provider, with outstanding growth prospects to boost the audience brought to its content and e-commerce web sites.
  • Grolier Interactive Europe SA, renamed “Lagardè”, will enter into a portal management contract for an initial period of 3 years by which Lagardère will supervise the development of the portal subsidiary and share portal’s revenues.
  • Lagardère and Deutsche Telekom to examine the possibility to create 50/50 joint investing vehicle to carry out any industrial and commercial development in respect of new Internet-related services and technologies.

Dr. Ron Sommer, Chairman of the Board of Management of Deutsche Telekom said: “The deal is a further step along Deutsche Telekom’s path toward becoming a pan-European world market provider. It represents a consistent continuation of Deutsche Telekom’s internationalization strategy. As the new member of the Telekom family, Club Internet is the ideal addition to our activities in France, it takes the internationalization of T-Online a step further and strengthens the Deutsche Telekom Group’s growth strategy. This French-German business venture also underscores our commitment toward a pan-European online partnership. “

Jean-Luc Lagardère, General Partner and CEO of Lagardère, said: “We view this transaction as a very strong partnership between an international telecommunications leader and a French-speaking internet access company, as well as with a worldwide powerful media group.”

Mr Arnaud Lagardère, Managing Partner of Lagardère and Head of the Media Division, said: ” This strategic alliance is a major step for Lagardère’s Internet strategy and further stresses the Group’s focus on its core Media activity. Internet is one of the fastest growing and exciting areas of this industry. We believe the T-Online’s proven expertise in Internet Service Providing business and links with a powerful international telecom operator will strengthen Club-Internet’s prospects, and bring a fantastic audience to leverage Lagardère’s editorial/Ecommerce expertise. This transaction further demonstrates our continuing commitment to building shareholders’ value.”

T-Online International CEO Wolfgang Keuntje said: “Following the launch of T-Online Austria, this business transaction is a further important step in the internationalization of T-Online on the online growth market. With the addition of Club Internet, T-Online will increase its reach considerably and will be able to market throughout Europe the Internet portals that have been so successful in Germany.”

About Lagardère

LAGARDERE (Bloomberg-Paris: MMB.FP ; NY: LGDDY; Reuters : LAGA.PA) is a premier media company whose strategy is to leverage its powerful brands, editorial expertise and cross promotion capability through its increasingly prominent presence on every digital platforms: pay-TV, interactive-TV, internet portals and e-commerce operations, mobile and radio broadcasting. The company is a worldwide leader in magazine publishing and press distribution, and a leader in France in book publishing. It publishes more than 200 magazine titles in 34 countries, and operates more than 1,000 retail outlets under the Relay brand name in travel areas (airports, railway stations…) all across Europe and North America.

The company also owns a 33% equity stake in Aerospatiale-Matra. Aerospatiale-Matra will soon merge with DaimlerChrysler Aerospace and Casa to form EADS, the largest aerospace and defense company in Europe and number 3 worldwide.

The company has developed and manufactures, on behalf of Renault, the successful Espace minivan.

For the full year 1999, LAGARDERE reported consolidated sales of 12.3 billion Euros.

About Deutsche Telekom

Deutsche Telekom, with revenues of about Euro 35 billion in 1999, according to preliminary figures, is Europe’s largest telecommunications company and the third largest carrier worldwide. A total of more than 13 million marketed ISDN channels makes Deutsche Telekom the world leader in ISDN and with more than 4 million T-Online customers, the company is Europe’s largest Internet provider. Offering a complete range of products and services, Deutsche Telekom has almost 48 million telephone lines in service and more than 16 million mobile telephony customers (including majority owned subsidiaries). Visit the Deutsche Telekom web site at:

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