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Vodafone Secures Key Ally in Battle for Mannesmann with Vivendi Alliance

Strategic Insights

— 1 min read

Vodafone AirTouch has forged a strategic Internet alliance with Vivendi, the French group, in a move that provides a significant boost to its bid to take over Mannesmann, the German conglomerate. The two companies have revealed plans to develop a Europe-wide, multi-access Internet portal, which will provide Internet access to 70 million customers of the two firms from mobile phones, fixed-line networks, pay-TV links, and computers. The surprise alliance with Vivendi, worth "tens of billions of euros", puts the French group squarely in the Vodafone camp, as it had been previously considering a similar deal with Mannesmann.

Key Takeaways:

  • Vodafone has secured a strategic Internet alliance with Vivendi, which will develop a Europe-wide, multi-access Internet portal.
  • The venture will provide Internet access to 70 million customers of the two firms from mobile phones, fixed-line networks, pay-TV links, and computers.
  • Vodafone has promised to transfer a further 7.5 per cent of Cegetel to Vivendi if it succeeds in its bid for Mannesmann, giving Vivendi 51 per cent of the telecoms firm.
  • The alliance is conditioned on the outcome of the battle for Mannesmann, and Vivendi has agreed to scrap plans and reopen talks with Mannesmann if Vodafone fails in its hostile bid.
  • The new company will be launched by June and floated on the stock market at a date yet to be fixed.
  • Vodafone will have 48 million mobile telephone customers if it takes over Mannesmann.
  • Vivendi will raise funds to purchase the Cegetel shares through the sale of assets.
  • The deal is seen as a significant coup for Vodafone, which has been struggling to secure the necessary support to take over Mannesmann.

Statistics:

  • 48 million: Vodafone will have mobile telephone customers if it takes over Mannesmann.
  • 70 million: The number of customers that will have access to the Europe-wide, multi-access Internet portal.
  • Tens of billions of euros: The value of the strategic Internet alliance between Vodafone and Vivendi.
  • 51 per cent: The stake that Vivendi will have in Cegetel if Vodafone succeeds in its bid for Mannesmann.
  • 40 per cent: News International's stake in BSkyB, which is owned by Vivendi.
  • 15 per cent: The stake that Mannesmann currently has in Cegetel.

Sources:

  • "Vodafone Wins Support from Vivendi", The Times, 2000

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