Vodafone Buys Outstanding Arcor Shares

Vodafone has confirmed that it is to acquire the 26.4% interest in Germany's Arcor that it does not already own from Deutsche Bahn and Deutsche Bank for a cash consideration of €474 million (US$739 million) - slightly lower than the widely expected €500 million (US$779 million). Vodafone says that the transaction enables it to exploit further the potential synergies available from fixed-mobile integration and to participate more effectively in the continued rapid development of the German broadband market, which is growing at just under 30% per annum.

Commenting on the transaction, Arun Sarin, Chief Executive of Vodafone, said: "This deal is consistent with our total communications strategy. By taking full control of Arcor and aligning it more closely with Vodafone Germany we will leverage the greater scale this presents, and generate synergies and substantial time to market benefits within EuropeÃ's largest telecommunications market."

An internal document seen by Dow Jones Newswires last month written by Vodafone Germany Chief Executive Friedrich Joussen suggested that the company would retain the Arcor brandname following a buyout.

The transaction meets VodafoneÃ's stated financial criteria and is broadly neutral to adjusted earnings per share from the date of the acquisition. There are no outstanding conditions to the acquisition and it will therefore be completed today.

Vodafone has been building out its fixed-line telephony assets in Europe over the past year, as part of an effort to gain more revenue from broadband services. Late last year Vodafone bought the Italian and Spanish assets of Tele2 in an all-cash deal worth EUR767 million.

Posted to the site on 19th May 2008