Merger plans for German mobile phone companies E-Plus and O2 are a step further from realization since British telecommunications company mmO2 rejected a friendly takeover offer from Dutch competitor KPN. mmO2, which owns German firm O2, and KPN, parent company of German firm E-Plus, have also been negotiating merging their activities in Germany. KPN chief Ad Scheepbouwer suggested that mmO2 could be subjected to a hostile takeover by KPN, a statement which he later took back. Analysts have said that O2, the smallest of the four domestic mobile telephone providers, is too small to survive on the German market. A merger between O2 and E-Plus could be a force for leaders Vodaphone and T-Mobile to contend with.