Vodafone offers $1.68 billion for Cable & Wireless Worldwide
- 23 April, 2012 19:19
Vodafone has offered to acquire Cable & Wireless Worldwide (CWW) for £1.04 billion (US$1.68 billion), as it aims to strengthen its enterprise offerings and network holdings, the company said Monday.
CWW owns the U.K.'s largest fiber network for business users, and an international cable network spanning approximately 425,000 kilometers, according to its website.
"This will strengthen our enterprise business both in the U.K. and internationally," said Vodafone CEO Vittorio Colao during a conference call presenting the deal. "We are convinced that we are getting interesting assets," he said.
The deal would make Vodafone the operator of the second-largest telecommunications network in the U.K., based on revenue, according to Vodafone. Today, Vodafone operates the fourth-largest U.K. network by revenue.
Vodafone first confirmed its interest in CWW in February. A Vodafone acquisition of CWW makes very good sense, Shaun Collins, CEO at market research company CCS Insight, said at the time. Enterprise and fixed services are Vodafone's growth engines, and buying CWW would help the operator expand its offerings, he said.
Also, CWW has the highest penetration of the business fixed services market in Asia-Pacific of the European and U.S.-owned telecoms service providers, David Molony, principal analyst at Ovum, said via email.
CWW's directors have agreed to recommend the deal, the company said, while according to Vodafone shareholders that own about 18.6 percent of the shares have also agreed to the deal.
Vodafone reserves the right to increase its offer if a another company comes up with a competing bid, it said.
Tata Communications had also showed an interest in acquiring the company, but pulled out last week, according to CWW.
Cable & Wireless Worldwide was created in November 2009 when Cable and Wireless announced its intention to separate its Communications and Worldwide business units. Last year, ex-Vodafone executive Gavin Darby took over as CWW's CEO.
Vodafone expects the deal will be approved during the third quarter.
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