Vodafone has announced it is to acquire Spanish cable operator Ono for €7.2 billion in a bid to boost its broadband and Pay-TV portfolio.
The agreement gives Vodafone 1.9 million new customers and access to the largest next-generation network in Spain.
Ono, which reported revenues of €1.6 billion last year, has access to a further 7.2 million homes – equivalent to 41 percent of total homes in Spain.
As a result, the UK-based operator said it will limit its FTTH rollout to 1.5 million homes, resulting in access to nearly 10 million homes or 57 percent of the total number of homes in Spain.
This, coupled with migrating Ono’s mobile traffic to Vodafone’s own network and ultilising Ono’s network for mobile backhaul, will generate savings of about €2 billion, Vodafone estimated.
Meanwhile, Vodafone said it expects potential revenue addition of €1 billion thanks to “a significant opportunity” to accelerate growth in unified communications products and services.
The operator will look to cross sell the two company’s services, which includes Ono’s Pay-TV service TiVO.
Last month, Vodafone revealed that revenues in Spain fell 11.2 percent in the three months to the end of December last year.
Vodafone Group CEO Vittorio Colao said: “The combination of Vodafone and Ono creates a leading integrated communications provider in Spain and represents an attractive value creation opportunity.
“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.”
Before Vodafone stepped in, Ono's private equity owners had plans of floating the cable provider on the Madrid stock exchange.
José María Castellano Ríos, the chairman of Ono, said: "As part of Vodafone, Ono will continue to seize new growth opportunities and deliver the quality that our customers expect. The enlarged business is also expected to drive innovation in the Spanish telecommunications industry."
Vodafone said it will finance the transaction from its existing cash resources and “committed but undrawn bank facilities”.
The operator, which is rebuilding its core European networks with proceeds from the €99 billion sale of its Verizon Wireless stake, said that the transaction is expected to complete in the third quarter of this year and is subject to regulatory approval.
The acquisition comes just six months after Vodafone bought a controlling stake in German cable operator Kabel Deutschland for €7.7 billion.