Telefonica SA, the Spanish telecommunications powerhouse that has been expanding in Latin America and Eastern Europe, has agreed to buy mobile phone company O2 In a $31.4 billion deal that will help expand in the UK and German markets.The Spanish company said on Monday it has agreed to pay 200 pence ($3.55) per share in cash for O2 shares, a 22 per cent premium over their closing price on Friday. The O2 board recommended that shareholders accept the offer.Telefonica Chairman Cesar Alierta said the deal would boost the company’s capacity for growth and balance its exposure regionally, giving it more assets in Europe after a recent expansion in Latin America. ‘‘It accelerates Telefonica’s already beneficial growth prospects, widening the gap with our peers,’’ he said. ‘‘We are entering in the two largest markets in Europe with critical mass.’’The deal follows Telefonica’s 2.75 billion euro ($3.32 billion) acquisition of a majority stake in Czech operator Cesky Telekom earlier this year as it expands in Europe.Peter Erskine, CEO of O2, said the geographic operating differences between the two companies was a strong reason for recommending the deal.‘‘It’s . good for customers. They have no overlapping territory, so they will be able to offer our customers better roaming and better services around the world,’’ Erskine told BBC Radio.Novartis to buy Chiron stakeDrugmaker Novartis has agreed to buy the remainder of US vaccine maker Chiron Corp that it does not already own for $5.1 billion, or about $600 million more than an original bid rejected as inadequate. The Swiss company, which already owns 42 per cent of Chiron, raised its cash bid on Monday for the remaining 58 per cent to $45 a share, $5 a share more than its original bid in September.Novartis’s sweetened bid raises its valuation of California-based Chiron by around $1 billion to $8.8 billion, a multiple of around 4.2 times estimated 2006 sales, according to one analyst.Novartis’s proposal was unanimously approved by Chiron’s independent directors, who had rejected the earlier bid as inadequate. It represents a premium of 23 per cent to Chiron’s share price before the first merger proposal was made.‘‘Our plan is to turn around the Chiron vaccines business, which will require investments in R&D and manufacturing to increase quality and capacity,’’ Novartis CEO Daniel Vasella said.
