YOU ARE AT:CarriersVodafone to buy Cable & Wireless Worldwide for $1.7 billion

Vodafone to buy Cable & Wireless Worldwide for $1.7 billion

Vodafone, currently the world’s second largest wireless operator, will pay $1.7 billion for Cable & Wireless Worldwide. Under the terms of the offer, Vodafone will pay 38 pence a share for CWW, representing 92% of the closing price on Feb. 10, the last business day before the offer period began.

The two U.K.-based companies have been in negotiations for two months. The takeover by Vodafone comes less than a week after India’s Tata Communications ended its interest in CWW and meets a deadline that was extended three times by the U.K. Takeover panel.

“We are pleased to reach agreement with the board of Cable & Wireless Worldwide, who unanimously recommend our offer,” said Vittorio Colao, CEO of Vodafone Group, in a statement. “The acquisition of Cable & Wireless Worldwide creates a leading integrated player in the enterprise segment of the U.K. communications market and brings attractive cost savings to our U.K. and international operations.”

Currently mobile phone giant Vodafone has equity interests in more than 30 countries, including a 45% stake in Verizon Wireless. The company expects that the acquisition of CWW, which has an extensive cable network in Europe and Asia, will strengthen its enterprise business in the U.K. and around the world.

Analysts noted the deal is a major step in Vodafone’s continued worldwide ambitions.

“In particular this is a major step up in global services for Vodafone, which will now have significant new enterprise customers worldwide, as well as the substantial international network systems and relationships that CWW has built up over many years,” explained David Molony, principal analyst at Ovum, in a report. “For CWW this goes a long way to securing the company’s position as No. 2 business services provider in the [United Kingdom], with potential funding for its ageing data centre network, while giving its global network a new mission statement – to take unified communications to global MNCs and large enterprises worldwide and to expand services in emerging markets in particular.”

While both Vodafone and C&W seem to be onboard with the deal, Bloomberg reported this morning that C&W’s largest stakeholder, Orbis Holdings Ltd., is looking for a bigger return.

“The proposed deal is clearly attractive for Vodafone shareholders,” Orbis said in a statement to Bloomberg. “However, we are concerned that the offer price does not appear to reflect the value inherent in CWW.”

ABOUT AUTHOR

Sara Zaske
Sara Zaske
Contributor, [email protected] Sara Zaske covers European carrier news for RCR Wireless News from Berlin, Germany. She has more than ten years experience in communications. Prior to moving to Germany, she worked as the communications director for the Oregon State University Foundation. She is also a former reporter with the San Francisco Examiner and Independent, where she covered development, transportation and other issues in the City of San Francisco and San Mateo County. Follow her on Twitter @szaske