(Updates with share price in seventh paragraph.)
Aug. 22 (Bloomberg) -- Vodafone Group Plc has agreed to buy 72.7 percent of Greek broadband company Hellas Online SA for 72.7 million euros ($96.5 million) and plans to make an offer for the rest of the company.
Vodafone already owned 18.5 percent of the Athens-based company, giving it a 91.2 percent holding, Vodafone said in a statement today.
The company is expanding its broadband offers across Europe as Chief Executive Officer Vittorio Colao bets on the popularity of bundled mobile and fixed services. The deal builds up Vodafone’s struggling southern Europe business, where service revenue dropped 26 percent in the last fiscal year ending in March.
Vodafone bought the shares from Intracom Group and World Equities Investments Holdings SA. The deal gives Hellas Online an equity value of 311 million euros, including debt, Vodafone said. Regulators still have to approve the deal.
Vodafone has gone after similar companies in Germany and Spain and has committed to spending 19 billion pounds improving its network in the next two years. Vodafone agreed to buy Grupo Corporativo Ono SA in March for 7.5 billion euros, including debt, and Kabel Deutschland Holding AG last year for 10.5 billion euros.
The combination with its Greek unit will make it the second-largest integrated phone company in Greece by revenue. Hellas Online had about 519,000 customers at the end of last year, Vodafone said in the statement. The Greek company reported 224.2 million euros in revenue last year.
Vodafone rose 1.1 percent to 204.8 pence in London trading at 1:38 p.m. The stock has declined 31 percent this year. Hellas Online gained 20 percent to 51 euro cents in Athens.
Hellenic Telecommunications Organization SA, whose two largest shareholders are Deutsche Telekom AG and the Greek government, is the largest phone company in the country and reported 4.05 billion euros in sales last year.
Vodafone forecasts an annual run rate of 24 million euros in cost and capital spending savings, the Newbury, England-based company said in the statement. Bank of America Corp. was Vodafone’s financial adviser.