Cable & Wireless have sealed the deal for rival Energis despite yesterday's challenge from Thus.
The deal, worth an initial £594 million, will add a clutch of corporate customers, including the BBC, RAC and Royal & Sun Alliance.
It will also strengthen C&W's position in the highly competitive telecoms market.
However, C&W warned the combination of the two businesses would result in the loss of 700 jobs by March 2008, as it looks for £80 million of annual savings.
The proposed tie-up, revealed last month, was almost derailed after some holders of Energis debt threatened to block the deal if the price was not increased.
C&W gave the funds until 5pm last night to back the takeover.
Earlier in the day Glasgow-based Thus shocked the industry when it tabled a counter proposal worth £800 million. It is a quarter the size of Energis but had managed to raise £600 million in cash, with the rest set to be paid in its shares.