16 August 2005 UK telecommunications company Cable &Wireless has reached agreement to acquire rival Energis for £594 million.

Energis is the third largest fixed-line telephone service operator on the UK. Its customers include the BBC, and motoring group the RAC.

“The timing of this acquisition allows us to exploit the rapid growth in demand for IP-based services,” said Francesco Caio, CEO of Cable & Wireless Group.

C&W has been tracking Energis for around two years, and managed to seal agreement for the deal despite a last minute bid from Glasgow-based Thus.

Thus had offered £800 million for Energis, including £600 million in cash, but the offer was rejected by the Energis management team.

“The fundamental changes in the UK telecoms market cannot be dealt with by yesterday’s model. This combination delivers what customers require today – a company with more capability, greater access and larger scale,” said John Pluthero, the current chief executive of Energis.

C&W will pay an initial £594 million for Energis, with further conditional payments over the next three years that could bring the total amount paid close to £800 million.

The acquisition is expected to be completed later this year, subject to regulatory clearance.