UK mobile phone giant Vodafone has agreed to buy telecoms group Cable & Wireless Worldwide (C&WW) in a deal valuing the firm at just over £1bn.
Vodafone was left as C&WW's only suitor after India's Tata Communications ended its interest in the firm last week.
Under the terms of the deal, Vodafone will pay 38 pence per C&WW share, giving the firm a value of £1.044bn.
The takeover will add a UK fixed-line network to Vodafone's existing mobile network.
C&WW operates 20,500km of fibre-optic cables in the UK and owning this network will give Vodafone greater capacity at a time when the increasing use of smartphones is leading to a rise in demand for mobile data.
Vodafone said the deal would also lead to cost savings, as at present it has to lease fixed-line capacity from companies such as BT.
Analysts suggested it was also strategically "really significant" for Vodafone's Global Enterprise division, which provides services for multinational companies.
Adding in C&WW's global networks, data centres and video conferencing, it will be able to offer them a broader range of services.
"While Vodafone has great mobile services support for enterprise customers, large companies and multinationals are looking for a combination of fixed and mobile services, and IT as well," said David Molony, global telecoms analyst at Ovum.
"It is really hard to do and the only companies that are near doing that are France Telecom's Orange and Telefonica, which own 02. That is where Vodafone wants to go," he told BBC News.
The Global Enterprise business currently has revenues of £1bn, but Vodafone wants to expand that by five or 10 times, Mr Molony said.
In a statement, Vodafone chief executive Vittorio Colao said: "The acquisition of Cable & Wireless Worldwide creates a leading integrated player in the enterprise segment of the UK communications market and brings attractive cost savings to our UK and international operations."
Vodafone also said there was likely to be "a reduction of headcount" and premises following the takeover to remove overlaps between the businesses, although it did not give any details on numbers or locations.
C&WW specialises in networking and broadband for corporate clients, including Tesco and the UK police service.
In 2010, it split from Cable & Wireless Communications, which offers telecoms services to consumers and businesses in almost 30 markets around the world including Jersey, Guernsey, the Caribbean and Panama.
However, C&WW has struggled since the separation. It has issued a number of profit warnings and is now on its third chief executive.
In the year to 31 March 2011, C&WW reported revenues of £2.26bn and a pre-tax profit of £140m. In the same financial year, Vodafone's revenues were £45.9bn, with pre-tax profits of £9.5bn.
The 38p per share offer represents a 92% premium to the level of C&WW's share price before the bid interest became known in February.
CW&W recommended that shareholders vote in favour of the deal, but Orbis, the largest single shareholder with a 19% stake, said the offer undervalued the firm.
"Although we believe the CW&W management team has handled the bid process responsibly, we have declined to give an irrevocable undertaking or letter of intent to support the transaction," and Orbis spokesperson said.
Shares in C&WW closed 12%, or 3.9p higher at 35.90 p.