Financial News

  • 17 March 2014, 22:52

Vodafone Shares Up In 6bn Spanish Ono Deal

Mobile phone giant Vodafone has seen its share price rise after agreeing to buy Spanish cable operator Ono for 6bn.

Vodafone's shares were up nearly 3% in mid-afternoon Monday trades in London.

The deal comes after it sold off its US joint-venture stake to Verizon for $108bn (69bn).

"The combination of Vodafone and Ono creates a leading integrated communications provider in Spain and represents an attractive value creation opportunity for Vodafone," chief executive Vittorio Colao said.

"Demand for unified communications products and services has increased significantly over the last few years in Spain, and this transaction ... will accelerate our ability to offer best-in-class propositions in the Spanish market."

The deal is due to be completed in the third quarter of this year, subject to regulatory approval.

Ono has nearly two million customers but has struggled to compete in Spain with rivals such as Telefonica and Jazztel, which bundle in-home services.

British-based Vodafone already has about 14 million customers in Spain, but has faced fierce competition.

It has previously admitted southern Europe has been a problem region for growth in the wake of the eurozone crisis.

Sky News City Editor Mark Kleinman earlier revealed Vodafone initially approached Ono over the sale last February but was rebuffed at first.

Ono is owned by a large group of investors, including the private equity firms Providence Equity Partners, Thomas H Lee Partners, CCMP Capital Advisors, and Quadrangle Capital.