German mobile service provider Drillisch is trying to force merger with German mobile service provider Freenet, four years after their first attempt, according to the Financial Times Deutschland citing sources within Drillisch and Freenet. Drillisch currently holds a stake of more than 20 percent (directly or indirectly) in Freenet and has proposed two new supervisory board members for Freenet. The annual general meeting of shareholders of Freenet is expected to confirm the board members on 30 June. Within the top of both companies, more cooperation or a possible merger is under discusion, but no clear plan on how has been decided on yet. The two companies are the last independent mobile service providers in Germany following years of acquisition and mergers, and a merger would increase their market power opposite the network operators. Both companies are also complementary as Drillisch focuses on selling discount services via internet and Freenet focuses on the higher end mobile tariffs through its more than 600 shops around Germany. A possible hurdle for a merger is the large amount of debt Freenet has (EUR 560 million at the end of March), while a possible merger is also expected to lead to job cuts, thus the need to convince employees of both companies of the need for a merger is also a priority. In a reaction to possible merger rumours, Freenet CEO Christoph Vilanek told the FTD that currently no talks are underway, but he also said that if competitors can work together, thus increasing their competitiveness on the whole market, the results can be good for both companies. At the same time, Freenet board members are willing to look into a merger as it is very logical.
