Vodafone extends convergence strategy with €73M deal in Greece

Vodafone agreed to acquire 72.7 per cent of Greek broadband provider Hellas Online for €72.7 million ($96 million) in cash, in a move that further extends the UK-based operator's strategy to buy up fixed network assets in markets where it already provides mobile services.

Vodafone Greece said the acquisition, which is subject to antitrust approval by the relevant authorities, is expected to complete in the fourth quarter of 2014 and would give it a 91.2 per cent stake in Hellas Online. The operator would then be obliged to launch a mandatory takeover offer for the remaining shares in the broadband company.

It has previously been speculated that Vodafone Greece was interested in raising its existing 18.4 per cent stake in the Greek broadband provider, which is currently also owned by the Intracom Group, and World Equities Investments Holdings. The two operators formed a cooperation agreement in 2009, when Vodafone Greece also acquired its initial 18.5 per cent stake.

Vodafone Greece said the deal would generate cost and capex synergies of around €24 million before integration costs by the third full year after the transaction is completed. These savings will be achieved through sharing network and IT infrastructure and the "rationalisation" of overlapping functions.

The operator contends that the merger, if successful, would create an integrated telecoms operator in Greece with the number two market position by revenues in fixed-line and mobile communications. Hellas Online had around 519,000 customers as of Dec. 31, 2013, representing a market share of about 11 per cent.

For 2013, Hellas Online also reported total revenue of €227.4 million, EBITDA of €68.4 million and capex of €36.7 million.

Vodafone Group has been snapping up fixed and cable assets across its European footprint as it seeks to ramp up its existing mobile businesses. The company recently acquired cable operator Ono in Spain, for example.

Latest rumours also suggest the UK operator is interested in entering the Brazilian mobile market through an acquisition of Telecom Italia's unit TIM Brasil. However, the Italian incumbent is reportedly preparing to bid up to €7 billion to acquire Vivendi's Brazilian broadband operator Global Village Telecom (GVT), which it would then merge with TIM Brasil to shore up its position as a provider of converged fixed and mobile services.

For more:
- see this Vodafone release

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