MERGER AND ACQUISITIONS

Merger and Acquisitions

Merger and Acquisition

Introduction

Mannesmann was acquired by Vodafone Group Plc. in 2000. This was a controversial takeover as never before in Germany had a large company been acquired by a foreign owner. This was a hostile takeover, but the merger was backed in a private deal between Mannesmann management and Vodafone. Indeed, the take-over of this long-established German enterprise is not only the largest and probably most expensive merger in recent economic history; it also has major social consequences (Schneper, 2004, 263).

The deregulation process in the telecommunications sector in Europe resulted in a first phase of development of multiple carriers, now in a second phase, going through a fierce cross-border consolidation process. The last episode of this transformation is almost imminent takeover bid of Vodafone on Mannesmann.

Mannesmann is a predominantly industrial sector took the German telecommunications deregulation to start in this business. Since then, the telecommunications division of the company has continued to grow in importance. To start this growth took as their business partner to Vodafone, who shared vision of the great potential of the continental European market. Now they share investment in the largest operator of mobile telephony in Germany through Mobilfunk, in addition to French and Italian, Omnitel SFR, both mobile phone. Mannesmann has taken flight and has also initiated other investments without the tutelage of Vodafone (Sako, 2006, 347).

Discussion

The British Company Vodafone Air touch won the biggest battle of all time business. After three months of grueling siege Vodafone succeeded in extracting a settlement from the German company Mannesmann to constitute the largest mobile operator in the world and the first European company by market capitalization, ahead of Finland's Nokia.Future Prospects

The merger of Vodafone and Mannesmann were expected to give the following benefits to the company:

Anglo-American mobile phone operator Vodafone AirTouch Plc. and German telecoms and engineering concern Mannesmann AG decided to merge, resulting in Mannesmann will receive 49.5% of the new company.

The new company, which will be the largest in the world, will have 30 million customers in the telecom markets of 15 countries, reports Deutsche Welle.

After several months of resistance, the majority of Mannesmann shareholders have agreed to the takeover bid by Vodafone AirTouch, becoming the largest operation of its kind in history. The price is set at 58.6 Vodafone shares for each share of Mannesmann, about 5% more than the previous offer. The combined company will have 42 million customers in 15 countries.

Vodafone will own 50.5% of the combined company while Mannesmann will own the remaining 49.5%. The chairman of Mannesmann, Klaus Esses, who has led months of opposition to the hostile bid from Vodafone, has finally accepted the offer, has announced its abandonment of the company, which will only remain until next June.

Esses said that at all times defended the interests of the shareholders of Mannesmann, emphasizing the value of the original offer made last October, valued at 100,000 euros, has been increased by almost 90% at around 190,000 euros (Rossi, 2003, 29).

Vodafone-Mannesmann: mega-merger history

When you hear the figures you think this is a ...