Vodafone gains business managed networks in CWW deal
Vodafone gains business managed networks in CWW deal
Mobile giant Vodafone has completed its £1 billion acquisition of Cable & Wireless Worldwide (CWW) in a deal that will gain it the UK’s largest business fibre network.
The deal has taken months to go through since Vodafone first expressed interest back in February. It was given the go-ahead after a rival bid from Tata of India was pulled. The deal will award C&W shareholders 38 pence per share, totalling £1.04 billion, which is significantly more than the £700 million first put on the table. Since then, shares in CWW have risen by 88 per cent.
Vittorio Colao, the CEO at Vodafone said that the acquisition creates a “leading integrated player” in the UK‘s enterprise segment.
The purchase could be a cost-based one rather than a strategic one, according to some onlookers who feel that the main purpose of the network deal is to avoid paying the fees to use BT fibre networks. Bloomberg quoted Espirito Santo Investment Bank’s Nick Brown, as stating: "It's an opportunistic deal and in keeping with their need to grow the UK business. For them, it's about cost savings."
However, Vodafone still also gains a major landline network serving a huge number of businesses. In addition, it also gains CWW’s data centre and managed networks division.
Strategically, the purchase could also have benefits for Vodafone in terms of the new business network infrastructure. This will benefit a key part of the firm's growth plans going forward in light of the saturation of the European consumer market.
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