Spanish cablers merge

Ono, Auna union creates rival to Digital Plus

MADRID — After a complicated courtship, Spain’s two main cable TV operators, Ono and Auna, have merged. Union creates a sizable pay television rival to Digital Plus in Spain.

Ono will pay E2.25 billion ($2.7 billion) for Auna’s cable and fixed-line telephony biz.

The sum is less than the offer Ono made in early July. But France Telecom’s purchase earlier this week of Amena, Auna’s mobile telephony company, left little option but for Auna to sell its remaining assets to Ono, which had presented a binding bid for just its cable and fixed telephony.

Ono will finance Auna’s purchase via bank debt and a $1.2 billion capital increase underwritten by JPMorgan Partners, Providence, Quadrangle and Thomas H. Lee.

Ono and Auna had 815,000 cable TV subs as of early this year. That compares with 2.1 million clients for Digital Plus, Spain’s biggest pay TV operator.

Ono-Auna’s main rival will be Spanish telco giant Telefonica. As a triple-play operation — offering cable TV, fixed-line telephony and Internet service — and with greater geographical reach, Ono and Auna are expected to take a significant chunk out of Telefonica’s less integrated businesses. It also aims to launch video-on-demand shortly.