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Journalism of Courage
DUESSELDORF, Feb 4: German telecom conglomerate, Mannesmann and Britain’s Vodafone Airtouch have agreed to the world’s biggest-ever merger, Mannesmann Chairman Klaus Esser said. The deal will create a global wireless telecommunications leader was worth about $ 185 billion, overshadowing the $ 155-billion America On Line-Time Warner union on January 10.
Following marathon talks called just four days before a record hostile bid closed, the two European partners were poised to end hostilities as Mannesmann’s management board unanimously recommended a fresh, all-share offer of 58.96 Vodafone shares per Mannesmann share.
The offer, to be put to investors, places an implied value on the German group’s stock of 353 euros per share and gives Mannesmann investors 49.5 per cent of the combined group, rather than the 47.2% originally on the table.
"We have agreed between us that Vodafone AirTouch will be making a revised proposal to Mannesmann shareholders," Vodafone Chief Executive Chris Gent told reporters atMannesmann’s Duesseldorf headquarters, adding that the German group’s management board was recommending the bid. But the deal, that ends a three-month battle for dominance of mobile communications in Europe, has yet to be ratified by Mannesmann’s supervisory board, which includes top industrialists and employees. The board held a three-hour meeting which broke up without agreement. Gent said it would meet again on Friday.
Four members of the supervisory board will be offered seats of the Vodafone Airtouch board as part of the deal. Vodafone, already the world’s largest mobile phone company, is poised to add to its fold Mannesmann’s 18.5 million customers to create a 54 million-strong global empire with interests stretching across 25 countries and five continents. "The merger of Vodafone Airtouch and Mannesmann is a combination of two highly successful companies and management teams that will create one of the world’s leading telecommunications groups," Vodafone said. "The merger will be based on theprinciples of mutual respect and cooperation."
Mannesmann’s chief executive Klaus Esser will become deputy chairman of the merged group after a vigorous campaign against Gent, during which he argued that his strategy focusing on Europe and both fixed, mobile and internet businesses would deliver greater shareholder value. But Gent just adopted the strategies Esser accused him of lacking, while waving his company’s global reach under Mannesmann investors’ noses.
