Vodafone has reportedly reached a verbal agreement with the owners of Ono to buy the Spanish broadband provider for €7.2 billion ($9.9 billion) including around €3.4 billion in debt, even though Ono shareholders approved plans on Thursday to carry out an initial public listing.
Spanish financial newspaper Expansion reported on Friday that Vodafone's new offer for Ono was approved late on Thursday. Ono declined to comment on the report and Vodafone said it does not comment on media speculation.
It was reported earlier this week that Vodafone had reached a preliminary agreement to buy Ono, but that Ono's management board was still moving ahead with plans to list the company until Vodafone made a firm offer.
Expansion said the contracts of sale are currently being drafted and will be signed in the coming few days. Such a deal would be subject to regulation, and it seems likely that a Vodafone-Ono tie-up would come under the scrutiny of European Union antitrust regulators.
The Spanish newspaper noted that Vodafone would gain access to 7 million households through the acquisition of Ono, but warned that the integration and management of three separate fixed networks--the Ono cable network, ADSL from Telefónica, and a new FTTH network being built in collaboration with Orange Spain--would present a considerable challenge to Vodafone.
A purchase of Ono would fit with Vodafone's strategy to increased its fixed assess across Europe to bolster its existing mobile activities through multi-play offers.
Ono is one of the few remaining independent cable assets in Europe after Vodafone bought Kabel Deutschland last year and Liberty Global acquired Virgin Media. Liberty Global recently secured Ziggo in a deal that valued the Dutch cable operator at €10 billion including debt, and was also reportedly interested in buying Ono.
Vodafone said on Friday that the integration of Vodafone Germany and Kabel Deutschland would now begin from 1 April 2014.
In February, Vodafone chief executive, Vittorio Colao, said the company could have a war chest of between $30 billion (€21.6 billion) and $40 billion for future mergers and acquisitions, and added that no deal should be too big if it made strategic sense.
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