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Cable & Wireless to buy Digital Island

Cable & Wireless, owner of one of the largest networks for Internet service providers, has agreed to buy Digital Island for $340 million in cash, plus assumed debt, Bloomberg reports.

London-based Cable & Wireless said it will pay $3.40 for each Digital Island share, and will assume $49 million in debt. Cable & Wireless has seen prices for carrying data and voice traffic slip in Japan and the United States. Digital Island, which offers a range of Web services to customers such as Microsoft and Sony, may help bolster Cable & Wireless sagging bottom line.

Digital Island will become a unit of Cable & Wireless. Digital Island, which speeds Internet transmission of audio and video, earlier this month said it would fire about 10 percent of its workers by the end of June to cut costs, and that its chief financial officer resigned. It had already fired 11 percent of its staff since January.