Just a few days after shareholders of Grupo Corporativo ONO approved plans for an initial public offering (IPO), UK-based Vodafone Group has agreed to acquire the Spanish cableco for a total consideration equivalent to EUR7.2 billion (USD9.9 billion) on a debt and cash free basis. According to the British company, the transaction ‘accelerates [its] unified communications strategy in a key, highly converged European market, providing a significant time-to-market advantage and network reach that is complementary to Vodafone Spain’s ongoing fibre-to-the-home (FTTH) build programme’. Further, Vodafone Group expects to achieve cost and CAPEX synergies with a run-rate of approximately EUR240 million before integration costs by the fourth full year after the deal is completed, equivalent to a net present value of approximately EUR2.0 billion after integration costs.
On the back of the acquisition Vodafone Group has said it sees a significant opportunity to accelerate growth in unified communications products and services by leveraging its distribution and marketing capabilities and through cross-selling to each company’s customer base. The British outfit estimates revenue synergies with a total net present value of approximately EUR1.0 billion.
Commenting on the deal, Vodafone Group CEO Vittorio Colao noted: ‘The combination of Vodafone and ONO creates a leading integrated communications provider in Spain and represents an attractive value creation opportunity for Vodafone. Demand for unified communications products and services has increased significantly over the last few years in Spain, and this transaction – together with our FTTH build programme – will accelerate our ability to offer best-in-class propositions in the Spanish market.’