Fresh off dumping its U.S. wireless interests for a cool $130 billion, Vodafone continued to expand its European play announcing plans to acquire Spain’s Grupo Corporativo Ono for $10 billion.
Vodafone noted that Ono currently serves more than 7.2 million homes with its next-generation network, offering wired broadband and a pay-TV service. One’s fiber-based broadband offering is said to provide network speeds up to 200 megabits per second and has been updated to the DOCSIS 3.0 standard.
Vodafone added that Ono’s network is complimentary to its own fiber-to-the-home plans, which it said would be focused on adding about 1.5 million homes in areas where Ono is not currently focused. Combined, Vodafone said it plans to touch 10 million homes, or approximately 57% of total Spanish homes.
The telecommunications giant also plans to cross-sell services between the two brands, including Vodafone’s mobile service to Ono customers. Vodafone is currently the second-largest mobile operator in Spain behind dominate player Movistar, which is controlled by Telefonica.
Vodafone said it plans to finance the deal through cash on hand, with the deal expected to generate significant savings through the use of Ono’s network for mobile backhaul and limiting Vodafone’s FTTH plans to the initial 1.5 million homes passed.
“As part of Vodafone, Ono will continue to seize new growth opportunities and deliver the quality that our customers expect,” said José María Castellano Ríos, chairman of Ono’s board of directors. “The enlarged business is also expected to drive innovation in the Spanish telecommunications industry.”
Vodafone last month closed on the sale of its 45% stake in Verizon Wireless to Verizon Communications for $130 billion. That deal consisted mostly of cash and shares in Verizon, with Verizon forking over $58.9 billion in cash and $60.2 billion in stock. In addition, Verizon issued $5 billion in notes payable to Vodafone; sold its 23% interest in Vodafone Italy for $3.5 billion, thereby providing Vodafone with full ownership of Vodafone Italy; with the remaining $2.5 billion of the transaction value a combination of “other considerations.” Vodafone announced it would turn around all of the Verizon shares and an additional $23.9 billion for a total of $84 billion back to its shareholders.
Vodafone has over the past several years begun to change its focus, purchasing more cable and wireline operations, while exiting some of its wireless businesses. Vodafone in 2012 acquired Cable & Wireless Worldwide for $1.7 billion in a move to bolster its enterprise business in the United Kingdom and around the world, and more recently acquired Kabel Deutschland for $10 billion.
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