The move follows the withdrawal of India’s Tata Communications from the bidding the process last week. However, the deal is still subject to shareholder approval.
CWW owns the biggest fibre optic network in the UK. Phil Codling, analyst at TechMarketView, said the acquisition will enable the company to build its 3G, and eventually 4G, network capacity.
“Vodafone will get to expand its ability to deliver services to large enterprises and public sector clients, giving it a boost in areas such as data services and unified comms to complement its own strength in mobile. That said, it is buying a somewhat underperforming operation in CWW, so we suspect a lot more than “lift and shift” will be required before it begins to realise the full benefits of integration,” he said.
John Barton, chairman of CWW, said: “The offer from Vodafone announced will enable shareholders to crystallise a value, in cash, that represents a significant premium to recent trading levels and avoid exposure to the risks inevitably presented by executing a medium-term improvement strategy.”
Vittorio Colao, CEO of Vodafone, said: "We are pleased to reach agreement with the board of Cable & Wireless Worldwide, who unanimously recommend our offer. 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."