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Vodafone to purchase Cable & Wireless for Â£1bn
Mobile network operator Vodafone is set to acquire Cable & Wireless Worldwide for a little over Â£1 billion.Vodafone has agreed a deal to acquire fibre optic broadband network operator Cable & Wireless Worldwide (CWW) for just over £1 billion in a move that the mobile phone giant believes will strengthen its enterprise business.
A statement from Vodafone explained that CWW had been advised by Rothschild and Barclays that the offer of approximately £1.044 billion is "fair and reasonable".
The mobile carrier was left as the leading bidder for CWW last week after India-based Tata Communications, which was also in the running to acquire the company, confirmed that it had pulled out of the race.
By purchasing the cable company, Vodafone will gain access to a fibre optic network that can be used to increase capacity on its own mobile network - an important step given the recent surge in mobile data usage.
Between 2011 and 2016, demand for bandwidth from smartphone, tablet and mobile broadband users is set to rise tenfold, according to Ericsson, with a significant increase in the popularity of online video viewing expected to drive this growth.
Commenting on Vodafone's offer, CWW chairman John Barton said the sum will give shareholders a "significant premium" on recent trading levels and will remove the risks attached to carrying out a medium-term improvement strategy.
"The combination with Vodafone represents an exciting opportunity for CWW's customers, employees, partners and other stakeholders to benefit from the many advantages that will come from being part of the Vodafone Group," he commented.
Vodafone Group chief executive Vittorio Colao expressed satisfaction that the CWW board had agreed to unanimously recommend the offer.
The acquisition will create one of the UK communications market's top enterprise propositions and will also result in "attractive" cost savings, he explained.
Mr Colao added: "We look forward to working with the management and employees of CWW to combine our expertise for the benefit of our customers and shareholders."