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Vodafone's Bid for Mannesmann: Mixed Signals from the Internet Alliance

Strategic Insights

— 1 min read

Vodafone's bid to capture Mannesmann has sent shockwaves through the telecommunications industry. In a surprise move, the UK-based company forged an extensive Internet alliance with Vivendi SA, a firm touted as likely to rescue Mannesmann from the hostile takeover. The alliance includes a joint venture to develop a European Web portal and future wireless operations collaborations. However, Mannesmann CEO Klaus Esser rejected Vodafone's plan to sell half of Mannesmann's stake in Cegetel, stating it would destroy Mannesmann's growth prospects and value for shareholders. Meanwhile, Vivendi CEO Jean Marie Messier sees the alliance as an ideal partnership.

Key Takeaways:

  • Vodafone AirTouch PLC has initiated an Internet alliance with Vivendi SA, a company that was earlier believed to be saving Mannesmann AG from the hostile takeover.
  • The alliance includes a 50-50 joint venture to develop a European Web portal and potential collaborations on wireless operations.
  • Mannesmann shareholders have until February 7 to decide on the $149 billion bid from Vodafone.
  • Vodafone plans to sell half of Mannesmann's 15% stake in Cegetel to Vivendi if the acquisition is successful.
  • The deal would give Vivendi over 51% of Cegetel, which Vodafone also has an interest in.
  • Mannesmann CEO Klaus Esser has rejected the plan, saying it would harm the company's growth prospects and value for shareholders.
  • Vivendi CEO Jean Marie Messier sees the alliance as a strategic opportunity, citing the high-speed technology revolution in the Internet world.

Statistics:

  • The bid value for Mannesmann shares is $149 billion.
  • Vodafone plans to sell half of Mannesmann's 15% stake in Cegetel to Vivendi, giving it over 51% ownership, assuming the acquisition is successful.
  • The joint venture for the European Web portal will be a 50-50 partnership between Vodafone and Vivendi.
  • Mannesmann shareholders have until February 7 to make a decision on the bid.

Sources:

  • NB) -- DUESSELDORF, GERMANY, 2000 JAN 31
  • The Wall Street Journal
  • Newsbytes.com, http://www.newsbytes.com

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