Vodafone Seeks Buyers for German Fixed-Line Business
As part of its $183 billion acquisition of Mannesmann AG in 2000, Vodafone Group plc inherited Arcor AG & Co. KG, a German fixed-line phone company that is Deutsche Telekom AG's only domestic competitor. Despite its size, with annual sales of €1.4 billion ($1.7 billion), Arcor has long seemed an odd fit for cellular-only Vodafone. The company has reportedly asked in-house banks UBS AG and Goldman, Sachs & Co. to solicit bids from trade and financial buyers. Analysts say a sale is likely, but possibly not imminent, due to a rumored price tag of about €1 billion, which trade buyers may find too high.
Key Takeaways:
- Vodafone Group plc is reportedly seeking buyers for its German fixed-line business, Arcor AG & Co. KG, which has annual sales of €1.4 billion ($1.7 billion).
- Arcor has long been an odd fit for cellular-only Vodafone, and a sale is likely, but possibly not imminent, due to a rumored price tag of about €1 billion.
- German Internet service provider freenet AG has expressed interest in Arcor, but analyst Ralf Hallman suggested the company would be paying too much to win 200,000 new customers.
- Vodafone inherited Arcor as part of its $183 billion purchase of Mannesmann AG in 2000, and now faces pressure to write off billions related to the purchase.
- Analysts say financial buyers may be Vodafone's only hope, given the asking price and the current state of the German IPO market.
Statistics:
- €1.4 billion: annual sales of Arcor AG & Co. KG
- $1.7 billion: annual sales of Arcor AG & Co. KG in US dollars
- €1 billion: rumored price tag for Arcor
- €640 million: sale price of debitel AG to Permira
- 18%: ownership stake of Deutsche Bahn AG in Mannesmann
Sources:
- "Wirtschaftswoche"
- "Frankfurter Allgemeine Zeitung"
- Bankgesellschaft Berlin AG
- UBS AG
- Goldman, Sachs & Co.
- Vodafone Group plc
- Arcor AG & Co. KG
- Deutsche Telekom AG
- Mannesmann AG
- Permira
- debitel AG
- Swisscom AG
- freenet AG
- Deutsche Bahn AG