The British operator put forward a bid in early February, and executives at both companies agreed the deal over the weekend.
Vittorio Colao, CEO at Vodafone, said in a statement today: “The combination of Vodafone and Ono creates a leading integrated communications provider in Spain and represents an attractive value-creation opportunity for Vodafone.”
Including approximately €3.3 billion in debt, the deal will be funded out of existing cash and arrears.
The acquisition expands Vodafone’s European operations with a broadband offering – as well as mobile, fixed-line and pay-TV services – and strengthens its position in Spain, one of its largest European markets.
“Demand for unified communications products and services has increased significantly over the past few years in Spain, and this transaction – together with our fibre-to-the-home build programme – will accelerate our ability to offer best-in-class propositions in the Spanish market,” Colao said.
Ono is 54% owned by investment funds Providence Equity Partners, Thomas H. Lee Partners, CCMP Capital Advisors and Quadrangle Capital, and the €7.2 billion price tag is 10.4 times Ono’s 2013 free cash flow.
The news follows an increased interest in a collaboration between cable and mobile operators, and last week, Liberty Global said that it was going to establish a pan-European MVNO.
