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 BUSINESS 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.
Düsseldorf 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 Düsseldorf area and will expand Düsseldorf-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.
FUTHER 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."