Germany's Freenet is buying the hosting business of Teles AG, one of the world's largest with more than 1 million active sites. Freenet will pay 132 million Euros ($175.7 million) to acquire the Tect, Strato and Cronon hosting brands, continuing an active consolidation of Europe's hosting industry.

The Teles hosting brands, which we group under Tect AG for measurement purposes, house more than 1.1 million active sites and 2.2 million hostnames. Freenet said it was particularly interested in Tect's success in dedicated hosting, one of the fastest-growing and most profitable sectors of the hosting business. Tect added 1,383 servers in the six-month period between April and October, growing 45 percent in that period, according to our Hosting Provider Server Count.

The deal is the latest in a merger-filled year for the European hosting market. In previous 2004 deals, VIA.Net Works bought PSINet Europe and France's Amen, Host Europe PLC was bought by Pipex, NetBenefit bought London-based rival Easily Ltd., and Lycos Europe bought United-Domains of Munich.

"Nothing will change for Strato customers," Tect CEO Rochus Wegener told Heise Online. "The Strato Group, with its focus on web hosting, and freenet.de, with its strong point in DSL, complement each other splendidly."