Vodafone Group Plc, the worlds second-largest telecommunications company, said in a statement on Friday, that it has reached an agreement to acquire 72.7% of Greek broadband company Hellas Online for €72.7 million (~$96.45 million), adding to the 18.5% Vodafone already owned. The London-based telecomm also said it also plans to acquire the rest of the Greek company.
The acquisition, which still awaits regulatory approval, would make Vodafone the second-largest Greek carrier, adding the 519 000 customers of Hellas.
The acquisition “creates a leading integrated telecom operator in Greece,” the UK-based telecom said. “The combined company will have the scale, management expertise, products and services and funding needed to compete more effectively in the Greek telecommunications market.”
The move is part of the UK telecoms drive to shore up activities and rejuvenate sales. Vodafones Southern European market has been struggling as the financial crisis hit the region hard, with unemployment, wages and general economic woes for Greece, Spain, Portugal and Italy. Vodafones revenue in the region dropped some 26% last year, while in Greece sales were down 14.1%.
Vodafone projects net savings of about €24 million annually through infrastructure sharing, as well as marketing and bill collection synergy.
The acquisition is the latest in Vodafones drive to expand European activities. It has already bought Grupo Corporativo Ono in Spain for €7.5bn and Kabel Deutschland Holding in Germany for €10.5bn. Vodafone has committed to spending some £19bn (~$32bn) in Europe over the next two years.
Vodafone Group Plc closed at 205.85 pence per share on Friday, up 1.60% for the day, valuing the company at £54.55bn (~$90.54bn). Shares are up 5.68% on an annual basis, and according to the Financial Times survey, the median estimate of 22 analysts offering 12-month price targets for Vodafone Group is 225.00 pence, a 9.30% increase from the last price. The analysts had a high estimate of 265.00 pence and a low estimate of 130.00.