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NEWBURY (Alliance News) - British telecom giant Vodafone Group PLC has reached a deal to buy Spanish cable operator Grupo Corporativo Ono SA for about 7.2 billion euros or USD10.01 billion, including the assumption of debt, according to media reports on Sunday. The deal will likely be announced by the companies on Monday.
The deal, Vodafone's first major acquisition since the recent sale of its 45% sake in Verizon Wireless to Verizon Communications Inc. (VZ), will bolster the company's mobile phone business in Spain with fixed-line services and pay-TV.
The acquisition of Ono is part of Vodafone's expansion into services such as high-speed Internet and television across Europe. Vodafone is boosting spending on upgrading its network and making acquisitions. Ono is Spain's second-largest provider of broadband Internet.
Ono is a provider of fixed telecommunications in Spain, including fixed telephony, broadband and pay TV, as well as a provider of mobile telecom services. Ono is the only fiber operator with national coverage in Spain that provides services to both homes and businesses. The company has faced increasing price competition from rivals like Telefonica SA (TEF, TDE.L) and Jazztel PLC.
Vodafone is said to have submitted a tentative offer for Ono ahead of the company's annual general meeting last Thursday, where Ono's shareholders approved a plan for an initial public offering for the company.
However, Ono's major shareholders, including private equity firms Providence Equity Partners, CCMP Capital LLC and Thomas H. Lee Partners, are also said to have preferred a sale of Ono over a listing on the Madrid stock exchange.
Vodafone was reportedly given access to the company's financial results as part of the due diligence process ahead of a potential deal.
The deal would be Vodafone's second major acquisition in six months. In September 2013, Vodafone agreed to buy a 76.5% stake in German cable operator Kabel Deutschland (KBHDF.PK) for 7.7 billion euros.
VOD closed Friday's trading at USD36.98, down USD0.22 or 0.59% on a volume of 7.72 million shares.
Copyright RTT News/dpa-AFX
