Vodafone
What country is Vodafone based in?
United Kingdom
Aside from being a provider in telecommunication industry, what are some of Mannesmann's other business lines?
Supplier in the fields of hydraulics, materials handling, plastics technology, and steel tubes
What is the principle of codetermination?
A practice where workers of an enterprise have the right to vote for representatives on the board of directors in a company. In this case, the supervisory board consisted of 20 members—ten represented the shareholders, seven the workforce of the corporation, and three the trade unions.
What is Vodafone's main objective in acquiring Mannesmann?
The acquisition of Mannesmann was aimed to consolidate Vodafone AirTouch's position in Europe. The acquisition would result in them becoming a global leader in the industry, with operations in25 countries and 42 million equity subscribers.
What's the significance of Orange PLC in this case?
Mannesmann's interest in acquiring Orange PLC caused frustration to Vodafone.
Why did Mannesmann initially reject Vodafone AirTouch's offer?
Low valuation
TRUE/FALSE: The German Supervisory Board has no direct influence on the company's operation
In Germany, law dictated the division of the board into a supervisory and a management board, each with distinct functions. The supervisory board has no direct operational influence, instead management board can make operational decisions.
What are the main synergies between Vodafone and Mannesmann?
Synergies include revenue enhancement, cost savings, and savings on capital expenditure
TRUE OR FALSE:
The acquisition deal between Vodafone and Mannesmann is the largest deal in M&A history
TRUE.
This was largest deal in history, valued at more than US$190 billion. Goldman Sachs was a financial advisor to Vodafone in the acquisition, which created the world’s largest mobile telecom provider
In what year did Vodafone become the largest mobile company in the world?
1999
Why did Mannesmann acquire Orange PLC?
High growth –- CAGR of 115% over 1994-1998
Reach -- Orange held high stakes in many parts of Europe, including France, Austria, Belgium. etc.
What are some of the main differences between the German and the UK/US board structure?
- The German board structure is broken into 2 parts: the management board and the supervisory board.
- The German board does not allowed any executives on the board.
- The German board reserves its seats for employee representatives.
What is the main issue with the valuation of Mannesmann?
The main issue is agreeing on the correct valuation of Mannesmann. Julius Baar, a German Investment bank, valued Mannesmann between €250 and €350 a share, while most other analysts valued Mannesmann between €174 and €250 per share.
How did the German public feel about the potential takeover?
The public response in Germany had been quite negative. Chancellor Schroeder stated that, “Hostile takeovers destroy corporate culture.” There was also a debate on whether the German government would be willing to demonstrate its willingness to embrace global capitalism.
Which firms did Vodafone AirTouch contact to act as major financial advisors in the deal?
Goldman Sachs & Warburg Dillon Read
Why did Mannesmann seek an injunction to restrain Goldman Sachs from advising Vodafone AirTouch? Did the UK High court approve the injunction application?
Mannesmann claimed that Goldman Sachs had a conflict of interest because of its prior involvement in matters affecting Mannesmann
On November 18, the UK High Court dismissed the injunction application
What is cross-holding? How is Mannesmann's cross-holders likely to benefit Vodafone AirTouch in the bid?
Cross-holding is a situation when a large institution owns stocks in another institution. In this case, Mannesmann's major shareholders were large institutional investors base in the US/UK with a few cross shareholdings. Roughly 40% of Mannesmann shareholders were also shareholders of Vodafone AirTouch.
How can both firms be affected if the bid was unsuccessful?
A failed bid would make Mannemann a direct competitor in the UK and negatively impact joint holdings in Germany, Italy, and France
It might also make both firms potential takeover targets - which can destroy the prospect of a European telecommunications champion
What company is D2? Who were the two major shareholders in the company?
D2 was initially Mannesmann, and it is the first private mobile phone network in Germany. The two major shareholders are Vodafone (35%) and Mannesmann (65%).