Business Summary

On December 17, 1999, Vodafone AirTouch, one of the leading international cellular telecommunications companies in the UK, designed a formal hostile bid for Mannesmann, one of its largest expert companies based in German. Mannesmann has just obtained another huge UK cellular operator, Orange colored. Vodafone 1st offered Mannesmann €138 billion dollars, or €266/share, which is way higher than its valuation recently. But Mannesmann rejected this tender give and requested €350/share. Vodafone has to make a decision whether it may raise the bet or certainly not and how to interact to the issues through the German born corporate governance law. Essential issues are as follows: 1 ) The synergies of this purchase are obvious, but the barrier is the cost. Some experts value Mannesmann in between €174-250/share, while others find it between €250-350/share. 2 . The German business governance method is very different through the Anglo-Saxon's. Workers have more claim on issues like M& A, making it difficult for Vodafone mainly because it needs to persuade people that this kind of acquisition will benefit all " stakeholders”. 3. The yet essentially voting restriction in Mannesmann's articles of association limitations Vodafone's political election up to five per cent, no matter how very much shares it acquires. Offered these facts, Vodafone needs to review their strategy, the valuation of Mannesmann plus the probability of successful takeover.

1 . Mannesmann's Acquisition of Lemon PLC

On October twenty, 1999, Mannesmann acquired Fruit to increase it is European footprint, in particular in UK, and develop their Internet, cellular and wireless data insurance coverage. However , the efficient industry hypothesis helps that Mannesmann had payed too much in their €31B acquisition of Orange, as confirmed by the almost 8. 3% drop in Mannesmann share selling price from €154. 1 before the October nineteen announcement to €141. several on October 22. Furthermore, the €31B purchase price can be 11. 4% higher than the €28. 4B valuation of Orange as part of Mannesmann (see Case Exhibit 11b). 2 ....

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