Vodafone has agreed to buy Spanish cable operator Ono for about $10bn, expanding the UK telco's European footprint.

Vodafone will acquire Ono for €7.2bn ($10.03bn, £6bn), including about €3.3bn in debt. Private equity-backed Ono is Vodafone's third acquisition in European fixed-broadband industry in two years.

Vodafone intends to source the acquisition from existing cash and debt.

Shares in the company rose 1.06% as at 8:42 am GMT, following the announcement.

The deal was reached after months of talks with Ono and its private equity owners: Providence Equity Partners, Thomas H Lee Partners, CCMP Capital Advisors and Quadrangle Capital, according to the Financial Times.

"The combination of Vodafone and Ono creates a leading integrated communications provider in Spain and represents an attractive value creation opportunity for Vodafone," said Vittorio Colao, Vodafone CEO.

"This transaction reflects Ono's attractive position as Spain's leading provider of high speed broadband, premium pay-TV and fixed communications," said José María Castellano Ríos, chairman of the Ono board.

The acquisition is expected to be part of the company's strategy to enlarge its global footprint after the $120bn sale of US arm to Verizon Wireless.

In September, Vodafone agreed to buy a controlling stake in German cable operator Kabel Deutschland. It had earlier agreed with French telecoms operator Orange to build out fibre networks in Spain – a move which is expected to complement the Ono deal.

Attractive Synergies

Ono is Spain's second-largest provider of broadband internet, pay TV and fixed-line. Vodafone is likely to add extra products to bundled tariffs as well as reduce the cost of its offerings.

"Demand for unified communications products and services has increased significantly over the past 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," Colao added.

The company expects about €1bn of revenue synergies by combining distribution, marketing and cross-selling in Spain. Meanwhile, annual cost and capital expenditure synergies are expected at about €240m.