Vodafone has agreed to buy Germany's largest cable operator Kabel Deutschland for €7.7 billion, making its biggest deal since 2007 a bet on TV and fixed line services to protect its most important market in Europe.

Announcing its second major acquisition for a European fixed-line network in 12 months, Vodafone said it would pay €87 euros per share for the group to enable it to offer more competitive packages with TV, fixed-line and broadband services to its existing mobile customers. The board of Kabel Deutschland said it expected to recommend the offer to its shareholders, meaning Vodafone has likely snatched the company from under the nose of John Malone's Liberty Global which entered the bidding fray in recent weeks.

“German consumer and business demand for fast broadband and data services continues to grow substantially as customers increasingly access TV, fixed and mobile broadband services from multiple devices in the home and workplace and on the move,” Vodafone chief executive Vittorio Colao said. “The combination of Vodafone Germany and Kabel Deutschland will greatly enhance our offerings in response to those needs.”

The combination of the two companies will result in a group with €11.5 billion of pro forma revenue in Germany, from 32.4 million mobile customers, 5 million broadband and 7.6 million TV customers. Vodafone, the world’s second largest mobile operator, said it expected in-market cost and capex synergies to exceed an annual run-rate by the fourth full year post completion of 300 million euros before integration costs. The British group had been forced to raise its offer following a last-minute challenge from Liberty Global after sources told Reuters that Europe’s leading cable operator had entered the fray earlier this month with an offer of €85 per share. Kabel Deutschland had been trading at €63 per share before Vodafone’s initial interest was reported in February.

Reuters