17th Mar 2014 08:09
LONDON (Alliance News) - Vodafone Group PLC Monday confirmed that it will acquire Grupo Corporative Ono S.A for EUR7.2 billion, as part of its strategy to build a unified communications provider in Spain.
The company said it expects to achieve cost and capex synergies from the acquisition of the Spanish network, with a run-rate of around EUR240 million before integration costs by the fourth full year after the acquisition is completed. Vodafone estimates it will see revenue synergies with a total net present value of around EUR1.0 billion.
Ono has a network of around 7.2 million homes, and serves 1.9 million customers in 13 regions of Spain, Vodafone said. It is the only fibre operator with national coverage in Spain that provides services to both homes and businesses.
Vodafone said that the acquisition will help it to complete its fibre-to-the-home roll-out to 1.5 million homes in Spain. It also noted that it will have the opportunity to cross-sell Ono's broadband, fixed telephony and pay-TV offerings to its existing customers.
"Demand for unified communications products and services has increased significantly over the last few years in Spain, and this transaction - together with our fibre-to-the-home build programme - will accelerate our ability to offer best-in-class propositions in the Spanish market," said Chief Executive Vittorio Colao in a statement.
Vodafone will fund the transaction using its existing cash resources and committed bank facilities.
The deal follows press speculation that Vodafone's plan to acquire the company would be complicated by Ono instead opting to list on the Madrid Stock Exchange.
The acquisition will be Vodafone's first major acquisition since it completed the sale of its 45% interest in Verizon Wireless for USD130 billion in February.
Vodafone agreed to buy a 76.5% stake in German cable operator Kabel Deutschland for EUR7.7 billion in September 2013.
At the open Monday, Vodafone shares were up 0.9% at 224.05 pence.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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