Vodafone Airtouch

The case talks about In November a hostile bid made by Vodafone AirTouch for its rival Mannesmann which was also an alliance partner. Both companies have similar background in telecommunications. They offered mobile services on the biggest markets in Europe: Vodafone in UK, Mannesmann in Germany. Vodafone focuses on mobile networks and has no fixed-line communications network. Mannesmann was a company with long tradition started at the end of nineteen century. . Through the acquisitions of domestic and foreign companies, Mannesmann had become a Central player in European telecommunications offering integrated telecom services.

The negotiations for the merger started in November 1999. In the first official bid for Mannesmann, Gent offered 43.7 Vodafone shares for every Mannesmann share. However the offer was rejected by Mannesmann's management stating offer was inadequate and the Germans at the moment were not interested in merging with any company. But just six days back Mannesmann had offered its share to acquire Orange at less than half price offered by Vodafone.

The merger plan emphasized efficiencies for both companies. According to Vodafone's management the merger would create Europe's global telecommunications leader and offer shareholders of both companies the opportunity to participate in the combined Group's future growth. A new company would be present across more markets, particularly in the US and Asian markets with significant growth potential. Mannesmann's European-only strategy offered much more limited prospects for independent future. So the contribution of Vodafone was wider scale of operations and presence in and outside Europe. They expected to arise significant synergies from the ability to leverage management best practices and purchasing economies, as well as the creation of the global brand and the introduction of new services Merger of both companies gave them stronger position on