Vodafone has agreed to acquire Ono for a total consideration equivalent to EUR 7.2 billion (GBP 6 billion) on a debt and cash free basis. Via the acquisition of Ono, Vodafone seeks to accelerate its unified communications strategy in Spain, providing a significant time-to-market advantage and network reach that is complementary to Vodafone Spain's ongoing FTTH build programme.
Vodafone expects to achieve cost and capex synergies with a run-rate of around EUR 240 million (GBP 200 million) before integration costs by the fourth full year post completion, equivalent to a net present value of approximately EUR 2 billion (GBP 1.7 billion) after integration costs. Vodafone estimates revenue synergies with a total net present value of EUR 1 billion.
Ono’s next-generation network has approximately 7.2 million homes released to marketing in 13 of Spain's 17 regions, reaching more than 300 municipalities. Ono offers fixed and mobile communications and television services to approximately 1.9 million customers. Ono has invested around EUR 7 billion in its network since 1998. The network has a future-proof fibre architecture with 500 homes per node and abundant spare capacity within its 862 MHz spectrum. It has been fully upgraded to DOCSIS 3.0. Ono owns nearly 96 percent of ducts in its access network.
The transaction provides Vodafone with immediate access to 7.2 million homes. Ono's network is complementary to Vodafone's FTTH build programme, which will be refocused towards areas where Ono has limited or no network presence. Vodafone intends to complete its FTTH rollout to 1.5 million homes passed, providing it with access to a NGN network covering up to 10 million homes released to marketing, equivalent to 57 percent of total Spanish homes.
Vodafone will be able to leverage its distribution network to increase the penetration of Ono's homes released to marketing. Ono also plans to cross-sell Ono's broadband, fixed telephony and pay-TV offerings to Vodafone's existing customers. Vodafone also expects to be able to cross-sell its mobile services to Ono's customers and offer new services, using both companies' product sets and networks. Vodafone will work closely with Ono's management team and employees to support the integration with Vodafone. Vodafone expects Ono's management to become an integral part of the local management team, focused on the broadband, fixed telephony and pay-TV segments of the combined business.
Vodafone will finance the Transaction from its existing cash resources and committed but undrawn bank facilities.
For the twelve months ended 31 December 2013, Ono reported revenue of EUR 1.59 billion, EBITDA of EUR 680 million, operating profit of EUR 269 million and loss before tax of EUR 41 million. At 31 December 2013, Ono had approximately 2,500 employees.
The transaction is subject to customary terms and conditions, including anti-trust clearances by the relevant competent authorities. Vodafone expects the transaction to complete in this year’s third quarter.
