Spain's largest telco Telefonica announced Monday it has agreed the £17.7 billion ($31.47bn; €26.03bn) acquisition of British cellphone operator O2, along with its German and Irish networks.

Madrid-headquartered Telefonica, the world's fifth-largest telecommunications company by market value, has been seeking an acquisition in Europe to match its investments in Latin America.

There are few such prizes left in the European teleco market, which over the past twelve months has been contracting in a frenzy of mergers and acquisitions.

Insiders say Telefonica decided to bed O2 on the rebound, after its romantic overtures were rejected by Dutch telecoms giant KPN. The strongly-performing British company has 15,000 employees and 24.6 million cellphone customers across the UK, Ireland and Germany.

Although other European phone networks have eyed O2, a counter-bid is unlikely to be on the cards. The European Commission has set its anticompetitive hurdles too high, with Telefonica the sole contender of any size without extant networks in the nations concerned.

A former unit of BT, O2 was spun-off as mmO2 in November 2001 as an independent listed company, rebranding as O2 in May the following year. It's ad agency is Vallance Carruthers Coleman Priest of London.

Data sourced from Wall Street Journal Online; additional content by WARC staff