Vodafone to buy Spain operator for €7.2bn

Vodafone has agreed to buy Spain’s largest cable operator Ono for €7.2bn, the latest big deal in the European telecoms sector.

The British group yesterday said it would use some of the $130bn (€93bn) proceeds from the sale of its US arm to acquire Ono, with a superfast cable network and 1.9m customers, to create a stronger challenger to market leader Telefonica.

The deal for private equity-owned Ono is Vodafone’s third purchase of a European fixed-broadband asset in two years, following similar moves in Britain and Germany, enabling it to offer fixed-line and mobile services, pay-TV, and broadband, while saving money on building and operating its networks.

The agreement, which comes as the French market undergoes a similar transformation, could also spark more consolidation within Spain as players such as France’s Orange seek out acquisitions to avoid falling behind.

Orange has been linked with Jazztel, Spain’s fourth-biggest telecoms operator, while Yoigo, owned by Sweden’s Teliasonera, is also seen as a likely target.

Ono has 1.9m customers on its network that covers 70% of Spain, or 7.2m households out of a total of around 16m.