Vodafone has agreed to pay £1.04 billion ($1.67 bn) for Cable & Wireless Worldwide, which operates high-speed mobile networks to police and governments, as well as owning a vast array of undersea cables.
The all-cash deal will go ahead subject to regulatory approval for between 38p ($0.62) a share, a bump from Friday's closing price of 32p ($0.51) a share.
Vodafone said it "reserves the right to increase the offer if a third party announced a possible offer or offer for C&W Worldwide," signalling heavy interest in the business.
Talks with India's Tata Communications broke down last week, leaving Vodafone as the front-runner after it was thought to have offered only 25p ($0.40) a share.
Cable & Wireless operates the largest fibre-optic network in the UK. Its fiber network is thought to be one of the main reasons Vodafone agreed to a deal as the country continues to cope with a rapid rise in mobile and Internet traffic.
Vodafone's corporate ventures will be significantly bolstered by the move, as its consumer arm reaches saturation point as UK growth slows to a trickle. Cable & Wireless outside of government and the public sector maintains contracts with major companies, such as UK superstore chain Tesco.
The mobile phone giant is reportedly aiming to break up the company, which owns more than 400,000km of undersea cables connecting around 150 countries, and sell off the undersea cable business.