Agreement on Terms for a Merger with Mannesmann
Vodafone AirTouch PLC
4 February 2000
3 February 2000
VODAFONE AIRTOUCH AND MANNESMANN
AGREEMENT ON TERMS FOR A RECOMMENDED MERGER
The Board of Vodafone AirTouch Plc is pleased to announce that
it has reached agreement with the Management Board of
Mannesmann AG on the terms of a merger to be effected by means
of a revised Offer (the 'Revised Offer') by Vodafone AirTouch
for Mannesmann. The Revised Offer is unanimously recommended
to Mannesmann Shareholders by the Management Board of
Mannesmann.
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. The merger will be based on the
principles of mutual respect and cooperation. The successful
integration of the two companies' complementary strengths in
mobile, fixed and data and Internet services will be the
highest priority.
Terms of the Merger
The key terms of the merger are as follows:
* A Revised Offer of 58.9646 Vodafone AirTouch Shares for each
Mannesmann Share.
* The Revised Offer values each Mannesmann Share at EUR 350.5
and Mannesmann's Share Capital at EUR 181.4 billion, based
on Vodafone AirTouch's Closing Price of 368.5 pence on 3
February 2000.
* Following the Revised Offer, and assuming full acceptance,
Mannesmann Shareholders will hold 49.5% of the Combined
Group.
* Dr. Klaus Esser will join the Vodafone AirTouch Board as an
executive director.
* Four members of Mannesmann's Supervisory Board will be
invited to join the Board of Vodafone AirTouch.
Management and Integration
The Vodafone AirTouch Board and the Mannesmann Management
Board led by Dr. Klaus Esser have agreed that integrating the
culture and skills of Mannesmann will be one of Vodafone
AirTouch's highest priorities following the merger. To
achieve this, Vodafone AirTouch has already committed to
respect the principle of codetermination in Mannesmann's
governance structure. Mannesmann's Management Board will use
best efforts to procure sufficient representation of Vodafone
AirTouch on the Supervisory Board of Mannesmann in order to
achieve the successful and prompt integration of the two
companies.
An Integration Committee will be established with
representatives from both Vodafone AirTouch and Mannesmann.
The Committee will be jointly led by Chris Gent and Dr. Klaus
Esser.
Mannesmann will have 5 representatives (1 executive and 4 non-
executive) out of a total of 19 on the new Vodafone AirTouch
Board. Dr. Klaus Esser has agreed to join the Board of
Vodafone AirTouch as an executive director and to continue as
Chief Executive Officer of Mannesmann. He will be
instrumental in the integration process, and will have
particular responsibility for the successful separation of the
industrial businesses under the terms of Mannesmann's existing
proposals. Following the successful separation of the
industrial businesses, Dr. Esser will give up his executive
responsibilities at Mannesmann and will become non-executive
Deputy Chairman of Vodafone AirTouch.
Mannesmann will be assured of participation in the senior
management of the Combined Group - with senior executives
being appointed to positions comparable to those they
currently hold within Mannesmann. All the current Chief
Executives of the major Mannesmann operating subsidiaries will
be confirmed in their respective roles.
Mannesmann's Businesses within the Combined Group
* Vodafone AirTouch will continue to develop Mannesmann's
wireless, wireline and internet strategy within the
Combined Group. Specifically, Vodafone AirTouch has
agreed not to dispose of the wireline activities of the
Combined Group and to review alternatives to its
previously announced intention to undertake a public
offering of a minority interest in the wireline
businesses.
* Dusseldorf will be retained as one of two dual European
Headquarters, with responsibility for Mannesmann's
existing Continental European mobile and fixed line
businesses and other assets to be determined.
* A key strategic objective of the Combined Group will be to
integrate and develop Mannesmann's tele-commerce
activities.
* Vodafone AirTouch will retain all current ongoing existing
facilities and activities in the Dusseldorf area and will
expand Dusseldorf-based activities, with particular
emphasis on data products and services. Vodafone AirTouch
reaffirms its public statement of commitment to Mannesmann
employees.
* Vodafone AirTouch confirms its commitment to undertake the
initial public offerings of the Engineering and Automotive
businesses along the lines of Mannesmann's previously
announced plans. Vodafone AirTouch will also pursue the
repositioning of Mannesmann's tubes businesses.
* In order to accelerate the successful integration of the two
businesses, Mannesmann has agreed to convene an
extraordinary shareholders' meeting to remove the 5%
voting restriction in its articles of association as soon
as reasonably practicable after the Revised Offer becomes
or is declared unconditional. Mannesmann will cooperate
fully with Vodafone AirTouch in the demerger of Orange.
The parties have also agreed to cooperate in obtaining all
necessary regulatory approvals.
Further Details of the Revised Offer
The terms of the Revised Offer are available to all Mannesmann
Shareholders including those who have previously tendered
their Mannesmann Shares. The Revised Offer will be open for
acceptance until 24.00 CET on 17 February 2000. Due to the
nature of the German depository banking system and the
significant lead times to book acceptances into DBC, Vodafone
AirTouch does not know the approximate number of Mannesmann
shares tendered to date.
Immediately after the Revised Offer becomes unconditional,
Vodafone AirTouch will issue new Vodafone AirTouch Shares in
respect of all those Mannesmann Shares that have been tendered
up until close of business on the day the Revised Offer
becomes unconditional. Settlement in respect of tenders after
this date will not occur until the day after the Revised Offer
finally closes pursuant to any extension after 17 February
2000.
Chris Gent, Chief Executive of Vodafone AirTouch, commented:
'We are delighted that the Management Board has agreed to
recommend our revised offer to Mannesmann Shareholders.'
'We have the greatest respect for the management and employees
of Mannesmann and their achievements in building one of
Europe's leading telecommunications businesses. We are
confident that the combination of our two great companies will
enable us to move forward rapidly to create one of the world's
leading mobile multimedia communications companies and to
generate superior growth and enhanced returns for shareholders
of both companies.'
'I am particularly pleased that Klaus Esser will be joining
the Vodafone AirTouch Board. I am also very happy that all
the members of the Mannesmann Management Board will continue
to play important roles within the Combined Group.'
Dr. Klaus Esser, Chief Executive Officer of Mannesmann,
commented:
'Our excellent teams will continue to create outstanding
success and value. They will make an extraordinary
contribution to the growth of the enlarged Vodafone AirTouch
group. I am proud and happy about this.'
Copies of this press release and the documentation published
in connection with the Vodafone AirTouch Offer for Mannesmann
(the 'Offer') can be obtained from the Vodafone AirTouch
website, www.vodafone-update.com.
Enquiries:
Vodafone AirTouch
Terry Barwick, Director of Corporate Affairs
Tim Brown, Investor Relations Director
Melissa Stimpson, Senior Investor Relations Manager
Mike Caldwell, Corporate Communications Director
Tel: +44 (0)1635 33 251
Advisers to Vodafone AirTouch
Goldman Sachs
Scott Mead
Simon Dingemans
Tel: +44 (0)171 774 1000
Warburg Dillon Read
Warren Finegold
Mark Lewisohn
Tel: +44 (0)171 567 8000
Tavistock Communications
Lulu Bridges
Tel: +44 (0)171 600 2288
Terms defined in the press release dated 18 January 2000, have
the same meaning in this press release.
This press release does not constitute an offer to exchange or
sell or an offer to exchange or buy any securities.
The contents of this announcement have been approved by
Goldman Sachs International and Warburg Dillon Read, the
investment banking division of UBS AG, solely for the purposes
of Section 57 of the Financial Services Act 1986. Goldman
Sachs International and Warburg Dillon Read, each of which is
regulated in the United Kingdom by The Securities and Futures
Authority Limited, are acting for Vodafone AirTouch and for no
one else in connection with the new Company to be created with
Vivendi and the Offer and will not be responsible to anyone
other than Vodafone AirTouch for providing the protections
afforded to customers of Goldman Sachs International or
Warburg Dillon Read or for giving advice in relation to the
Company and the Offer.
The Offer in the United States is being made through a
prospectus which is part of an effective registration
statement filed with the U.S. Securities and Exchange
Commission. Mannesmann Shareholders who are U.S. persons or
are located in the United States are advised to read the
registration statement because it contains important
information relating to the Offer. You can inspect and copy
the registration statement relating to the Offer and documents
incorporated by reference therein at the public reference
facilities maintained by the U.S. Securities and Exchange
Commission at 450 Fifth Street, N.W., Room 1024, Washington
D.C. 20549. In addition, copies of the US Offer Document are
available from The Bank of New York, 101 Barclay Street, Lobby
Window, New York, NY 10286.
For additional information regarding risks, see the
Registration Statement on Form F-4 and other reports of
Vodafone AirTouch Plc on file with the Securities and Exchange
Commission. Copies of these filings are available on request
directed to Vodafone AirTouch, Investor Relations, Tim Brown
(tel: + 44 1635 682 373).
It is the responsibility of any person receiving a copy of
this announcement in any jurisdiction other than the United
Kingdom, Germany and the United States to satisfy themselves
as to the full observance of the laws and regulatory
requirements of the relevant jurisdiction, including the
obtaining of any governmental or other consent which may be
required or observing any other formalities needing to be
observed in such jurisdiction. Receipt of this announcement
will not constitute an offer in those jurisdictions in which
it would be illegal to make such an offer and in such
circumstances it will be deemed to have been sent for
information purposes only.
Statements in this press release relating to future status or
circumstances, including statements regarding future
performance, costs, revenues, cash flows, earnings,
divestments, growth and other trend projections and the
synergistic benefits of the merger are forward-looking
statements. These statements may generally, but not always, be
identified by the use of words such as 'anticipates',
'should', 'expects', 'estimates', 'believes', or similar
expressions. By their nature, forward-looking statements
involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There
can be no assurance that actual results will not differ
materially from those expressed or implied by these forward-
looking statements due to many factors, many of which are
outside Vodafone AirTouch's control, including steps that
Mannesmann's management may take to frustrate Vodafone
AirTouch's efforts to obtain managerial control of Mannesmann,
increase the costs or reduce the benefits of the transaction,
the triggering of change of control provisions in Mannesmann's
licences or other agreements, the ability to obtain regulatory
approvals without onerous conditions, the impact of labour
disputes, the risk of negative impacts on Vodafone AirTouch's
credit ratings, the potential costs, including tax costs, of
divesting Orange and Mannesmann's industrial businesses,
limitations on Vodafone AirTouch's ability to control
Mannesmann due to voting restrictions and other provisions of
Mannesmann's charter and German law, general economic
conditions, competition, technical difficulties and the need
for increased capital expenditure (such as that resulting from
increased demand for usage, new business opportunities and
deployment of new technologies), the ability to realise
benefits from entering into partnerships for developing data
and internet services, and the inability of Vodafone AirTouch
and Vivendi to agree the detailed terms for the Company.
Latest directors dealings
- 5 hours ago ASOS
- 6 hours ago MJ Gleeson
- 6 hours ago Rolls-Royce Holdings
- 6 hours ago Crest Nicholson Holdings
- 7 hours ago Naked Wines