Thus, the Scottish telco behind the Demon ISP, has finally confirmed plans to buy Your Communications (YC) and Legend Communications after being linked to both companies for months.

Announcing a shake-up the telco says will bulk up the business and deliver cost savings, it also says it plans to flog its Demon Netherlands business so that it can concentrate on the UK.

The acquisition of YC and Legend - which sees Thus expand its position as an alternative carrier for business customers - is also set to generate more than £25m in savings, although the firm has yet to say whether these "operational cost synergies" will include job losses. Thus has so far failed to return a call requesting comment about the future of jobs at Thus, YC and Legend.

YC is an alternative carrier for business customers and the public sector providing services predominantly in the north west of England. As part of the deal to acquire YC, Thus is to give parent company United Utilities (UU) a stack of shares worth around £58.8m. In return, UU gets a 22.5 per cent stake in the enlarged group.

Legend, the Lancaster-based ISP and VoIP outfit which was hit by increased competition and bad debts, is to be bought for £11.5m.

Thus chairman Philip Rogerson says the deal will create a "larger, stronger and more focused participant in the UK telecommunications market".

"The acquisition is part of a trend towards consolidation in our industry that, we believe, offers the potential to create a more sustainable industry structure and improve returns. The trend towards consolidation coincides with decline in demand for traditional telecommunication services and an increase in demand for more innovative, next-generation services," he said.

If all goes to plan both deals should be completed within the next few weeks. ®

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