Vodafone seals Mannesmann deal

Vodafone AirTouch has finally succeeded in taking control of Mannesmann after last-minute concessions overcame the objections of the German group's board.The deal announced on Thursday got the official seal of approval from Mannesmann's supervisory board at a meeting in Frankfurt on Friday.The two sides had been locked in talks for seven hours on Thursday to finalise details, having reached agreement in principle on friendly terms.

The £112bn ($183bn) all-share deal is the largest corporate merger in history.It brings to an end months of rancorous negotiations, claims and counterclaims in a bidding battle mixing big business, politics and union uproar.The new company - which will have some 42 million customers - will be run from Vodafone's Newbury headquarters, although Mannesmann will continue to have a head office in Dusseldorf.Chris Gent Chris Gent will head the new company As control of Mannesmann is passing to the UK, the German group will be delisted from Frankfurt's Xetra Dax share index.The total value of the Vodafone group on the stock market, after paying $183bn for Mannesmann in shares, will be $365bn (£228bn), making it by far the largest company on the London stock market and the fourth-largest in the world.Its value reflects the bright prospects for the growth of mobile phone ownership around the world - and the huge boost provided by internet services soon being available via mobiles.As the biggest mobile phone company in the world, the combined Vodafone/Mannesmann group will galvanise rival companies into plotting their own link-ups to be able to compete in the global market.

Investment

Vodafone consumers are likely to see little immediate difference, although the company says that it will have more money for investment in the next generation of mobiles.However, Orange, which was bought last year by Mannesmann, will have to be put up for sale to satisfy competition regulators in the UK.The deal also signals a more aggressive merger climate in Europe, where business has traditionally been conducted on a more co-operative basis than in Britain or the US.

It was welcomed by Prime Minister Tony Blair and, more reluctantly, by German Chancellor Gerhard Schroeder, who had initially criticised the hostile bid.Mr Blair's spoeksman said: "The Prime Minister welcomes the proposed merger as very good news and a demonstration of how Britain can be a world leader in the knowledge-driven economy."Vodafone's Chris Gent will head the company, while, contrary to expectations, Klaus Esser will stay on as an executive director to help with the transition.Klaus Esser will stay to help transition : A Vodafone spokesman said: "They are two strong businesses and together we can go from strength to strength."Savings from combining the two companies are estimated to total at least £500m, with a minimal impact on jobs as the pair have few overlaps in their businesses.There were mass protests among Mannesmann's German workers when the takeover bid was first announced - but Vodafone has now said there will be no job losses in Germany.

Source :http://news.bbc.co.uk