Telecommunications company Vodafone has acquired one of the largest next-generation networks in Spain with Group Corporativo Ono.

According to Vodafone, it has agreed to acquire Ono for the equivalent of $10 billion on a debt and cash free basis. Ono is available in Spain to approximately 7.2 million homes and serving customers in 13 of Spain's 17 regions. Ono has been touted as a leader in the high-speed broadband market and offers pay-television service in the country.

"The combination of Vodafone and Ono creates a leading integrated communications provider in Spain and represents an attractive value creation opportunity for Vodafone," said Vodafone Group Chief Executive Vittorio Colao. "Demand for unified communications products and services has increased significantly over the last 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. We look forward to welcoming the management and employees of Ono to Vodafone and working together to serve our customers across Spain."

Portada noted the acquisition will increase Vodafone's presence in Spain against rival Telefónica and even German-based Deutsche Telecom. Vodafone noted the transaction will also improve its "unified communications strategy" in a "key, highly converged" European market.

"As part of Vodafone, Ono will continue to seize new growth opportunities and deliver the quality that our customers expect," said Ono Board of Directors Chairman José María Castellano Ríos. "The enlarged business is also expected to drive innovation in the Spanish telecommunications industry."

In regards to Ono's current employees, Vodafone acknowledged it will work closely to integrate them into Vodafone and benefit from a "broader range of international career opportunities" offered by Vodafone.

"The transaction enables Vodafone to take advantage of the rapid increase in the adoption of unified communications products and services in the Spanish market and provides Vodafone with immediate access to 7.2 million homes at a significant time-to-market advantage," noted Vodafone in a statement, noting Morgan Stanley is serving as acting financial adviser to the transaction.

Vodafone projected the transaction to be completed by the third quarter of 2014. The acquisition, however, is subject to customary terms and conditions as well as anti-trust clearances from regulatory bodies.

"The deal will be Vodafone's biggest acquisition since its [$130 billion] sale of its stake in the U.S. mobile network Verizon Wireless to Verizon communications earlier this year," added Portada. "Vodafone said is planning to spend at least [$34 billion] of the sum generated by Verizon Wireless's stake, on investments in its European Networks."

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