By Natascha Divac

FRANKFURT--Germany's United Internet AG has agreed to buy Deutsche Telekom AG's web hosting unit Strato for about 600 million euros ($630 million), both companies said Thursday.

Deutsche Telekom acquired the hosting services provider for EUR275 million in 2009. Based in Berlin, Strato employs more than 500 people with operations mainly in Germany and the Netherlands.

The sale is part Deutsche Telekom's strategy of "increasing the value of business areas that can no longer be adequately developed within the group" through partnerships or disposals, it said.

Strato's products include domains, e-mail packages, website packages, web shops, servers, online storage and individual high-end hosting.

The unit is expected to post 2016 revenue of around EUR127 million.

United Internet said it plans to acquire Strato through a holding structure in which private-equity firm Warburg Pincus will hold a stake.

The transaction is awaiting approval by the German Federal Cartel Office. It is expected to close in the first half of 2017.

Write to Natascha Divac at natascha.divac@wsj.com

(END) Dow Jones Newswires

December 15, 2016 03:32 ET (08:32 GMT)

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