Vodafone has agreed to buy corporate telecoms company Cable & Wireless Worldwide (CWW) for £1.04bn, in a deal that adds a British fixed line network to its wireless network.
Vittorio Colao, chief executive of Vodafone, said: "The acquisition of Cable & Wireless Worldwide creates a leading integrated player in the enterprise segment of the UK communications market and brings attractive cost savings to our UK and international operations."
Vodafone is offering CWW shareholders, who have had a torrid time since the group split from the former Cable & Wireless in March 2010, 38 pence a share in cash, a 92 per cent premium to the price before it declared its interest in February.
CWW has issued three profit warnings, had the same number of chief executives and has suspended it dividend since it split.
But it has a fibre network that would increase capacity for Vodafone, and it has contracts to provide voice, data and hosting services to British government departments and companies.
India's Tata Communications was also in talks to buy CWW, but it withdrew last week.