Telefonica buys $1.6bn Internet unit from Bertelsmann

Spanish telecom company Telefonica has bought Bertelsmann's Internet unit, MediaWays, for $1.6bn.

German based Bertelsmann said an agreement had been signed offering Telefonica the option of buying the Internet access division by April. The decision marks another step in Bertelsmann's strategy to move away from the ISP market and focus on ecommerce services.

Telefonica will integrate Mediaways into its Internet arm, Telefonica Data, and will gain access to Germany's largest data networks and also inherit a licence to offer telephone services in Germany.

Guillermo Fernandez Vidal, CEO of Telefonica Data, said the purchase of Mediaways represents a landmark in the company's European expansion.