Vodafone to buy Cable & Wireless for £1bn

Vitorrio Colao: chief executive of Vodafone group
Vitorrio Colao: chief executive of Vodafone group

Vodafone has agreed to buy troubled telecoms company Cable & Wireless Worldwide (CWW) in a deal valued at £1.04bn.

Vodafone is carrying out the acquisition to strengthen its enterprise business in the UK and abroad by expanding its network and creating cost-saving opportunities.

CWW provides high-speed telecoms services to companies including Tesco and the police.

It marks an attractive proposition for Vodafone, as the telecoms company moves  to grow its corporate business at a time of weak consumer growth.

CWW's fibre cable network is expected to relieve pressure on Vodafone's mobile network, while the latter's enterprise business will gain a boost because CWW already has contracts providing voice, data and hosting services to government departments and companies, including Tesco.

Cable & Wireless directors will unanimously recommend that shareholders vote in favour of the takeover.

Vitorrio Colao, chief executive of Vodafone group, said: "The acquisition of Cable & Wireless Worldwide creates a leading integrated player in the enterprise segment of the UK communications market and brings attractive cost savings to our UK and international operations."

Vodafone has beaten off a rival approach from Tata Communications, the India-based telecoms company. 

Follow Matthew Chapman at @mattchapmanUK

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