Vodafone buys Ono for $10bn

March 18, 2014 - 8:08:32 am

A shop assistant at an Ono shop in the Andalusian capital of Seville.

 

 

LONDON: Vodafone agreed yesterday to buy Spanish cable firm Ono as the British mobile phone giant stepped up its expansion in Europe using the proceeds from the sale of its US joint venture stake. 

The London-listed group will purchase Ono for €7.2bn ($10bn) including debt, it announced in a statement. Vodafone, flush with cash from the sale of its Verizon Wireless stake to partner Verizon for $130bn, said the Ono deal was a “significant opportunity” to create a market leader in Spain.

“The combination of Vodafone and Ono creates a leading integrated communications provider in Spain and represents an attractive value creation opportunity for Vodafone,” said chief executive Vittorio Colao. “Demand for unified communications products and services has increased significantly over the last few years in Spain, and this transaction ... will accelerate our ability to offer best-in-class propositions in the Spanish market. We look forward to welcoming the management and employees of Ono to Vodafone and working together to serve our customers across Spain.”

The acquisition marks Vodafone’s latest move to grow in Europe following its recent €7.7bn takeover of Kabel Deutschland, the largest cable operator in Germany, and amid fast-moving consolidation within the industry.

“This is another shrewd strategic move for Vodafone which brings with it the fixed line operation they were lacking in Spain,” said Mike McCudden, head of derivatives at online broker Interactive Investor.

“Expect more strategic acquisitions from the telecoms goliath as the array of European operators looks to consolidate,” he said.

The Ono transaction, worth £6bn, is expected to complete in the third quarter of this year but remains subject to regulatory approval.

“This transaction reflects Ono’s attractive position as Spain’s leading provider of high speed broadband, premium pay-TV and fixed communications,” said Jose Maria Castellano Rios, chairman of the Ono board of directors, in yesterday’s statement.

AFP

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