(Bloomberg News) -- Equinix Inc. agreed to buy Telecity Group Plc for 2.35 billion pounds ($3.6 billion) to create a trans-Atlantic data-center operator, scuttling the U.K. company’s planned merger with Interxion Holding NV.

Equinix, based in Redwood City, California, is paying a mixture of cash and stock that equals 1,145 pence a Telecity share in a deal recommended by the target’s board, the companies said Friday. That’s 5 percent more than the stock’s latest closing price in London. The shares fell 0.4 percent to 1,086 pence in London at 10:26 a.m.

The deal means Telecity’s planned combination with Interxion of the Netherlands will be terminated. Equinix first approached London-based Telecity early in May, two months after Telecity agreed to merge with Interxion. Data-center companies are exploring mergers as consumers and companies use more of their services to store information remotely and access it on mobile phones, tablets and computers.

“Equinix is definitely getting this for a good price given the strategic fit and the strategic value of Telecity’s network hubs,” Jefferies LLC analyst Milan Radia said in an interview. Telecity is coming off of a period where customers reduced the capacity they were taking from the business, he said. Equinix’s churn has been at the same level for the past few quarters, Schwartz said.

An Interxion representative couldn’t immediately be reached for a comment.

Offers Surge

Equinix fell 0.3 percent to $269.19 in New York on Thursday as Interxion added 1.2 percent to $31.21.

Equinix plans to operate globally and Telecity gives it presence in new markets, including in the U.K., Ireland and the Nordic region, Erik Schwartz, head of Europe, Middle East and Africa for Equinix, said in an interview by phone. Telecity also operates in smaller markets that have strong growth prospects, such as Warsaw, Sofia and Istanbul, he said.

The acquisition will also result in savings, including “revenue synergies, capex synergies and opex synergies,” Schwartz said. It’s too early to quantify the savings, he said.

The deal adds to a surge in offers for U.K. technology and telecommunications equipment this year as buyers take advantage of Britain’s relatively low tax rates. The amount buyers have agreed to spend for companies in the industry has more than doubled so far this year, according to data compiled by Bloomberg.

Suwanee, Georgia-based Arris Group agreed to buy Pace Plc, a T.V. set-top box maker from Yorkshire, for $2.1 billion in April. Qualcomm Corp. agreed the purchase of the U.K.’s CSR Plc in October in a deal expected to be completed this summer.

Telecity’s operations range from Dublin to Sofia and Istanbul to Stockholm. Equinix works in the U.S., Canada, Brazil, several countries in Europe and Asia, the United Arab Emirates and Australia.

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