Vodafone has bought communications giant Cable & Wireless Worldwide, in a deal that values the firm at a reported £1.04bn.
The deal follows the collapse of a previous bid last week by Tata Communications, and was first mooted earlier this year.
CWW is separate from Cable & Wireless Communications, also a UK-based multinational telco, as the two demerged in 2010.
The move is intended to strengthen Vodafone’s enterprise and international services, and will let the mobile operator offload increasing mobile traffic onto the Cable & Wireless Worldwide (CWW) fibre network in the UK.
CWW offers data and hosting services, as well as legacy voice services. The acquisition will, by revenue, help Vodafone leapfrog rivals O2 and Everything Everywhere to become the second-largest telco in the UK after BT.
CWW generates £2.3bn in revenue each year globally, with 38 percent of that coming from UK businesses.
Vodafone CEO Vittorio Colao hailed the mobile operator’s planned acquisition of Cable & Wireless Worldwide, saying: “The acquisition of Cable & Wireless Worldwide creates a leading integrated player in the enterprise segment of the UK communications market and brings attractive cost savings to our UK and international operations. We look forward to working with the management and employees of Cable & Wireless Worldwide.”
CWW chairman John Barton added: “Under the leadership of Gavin Darby, Cable & Wireless Worldwide has outlined a strategy to refocus the business on achieving sustainable cash generation and returns from capital invested.
However, the offer from Vodafone announced today will enable shareholders to crystallise a value, in cash, that represents a significant premium to recent trading levels and avoid exposure to the risks inevitably presented by executing a medium-term improvement strategy. Furthermore, the combination with Vodafone represents an exciting opportunity for Cable & Wireless Worldwide’s customers, employees, partners and other stakeholders to benefit from the many advantages that will come from being part of the Vodafone Group.”
CWW’s fibre network is 20,500km long in the UK, and 425,000km long internationally, with 127 points of presence in 35 countries. The company owns a number of submarine cables around the world, along with many datacentres.
The two companies said that, pending regulatory approval, they expect the deal to close in the third quarter of the year.