Company Of The Week: Vodafone Group
Sunday 10 January 1999
In an industry that is expected to almost triple in size over the next three years, analysts say it is a tough combination to beat. "In terms of long-term strategy it would be a great deal for them to do, and I think the market would be very supportive of it," said Tressan MacCarthy, an analyst at Credit Lyonnais Securities.
AirTouch would almost double the size of the UK company and create the world's biggest mobile phone company with 25 million customers. The two have been in merger talks before, but Vodafone's interest took on a new urgency after Bell Atlantic made a bid, estimated at $43bn (pounds 26bn), for AirTouch last week. The move prompted Vodafone to offer a bid of about $54bn for AirTouch.
Key to the purchase, say analysts, is AirTouch's business in Europe, where mobile phone use is among the world's highest and services operate on a single digital technology. AirTouch's assets would enable Vodafone to forge a pan-European network from Sweden to Greece with little overlap.
Vodafone's triumph isn't guaranteed. On Thursday, MCI Communications was said to be considering entering the bidding. This would be an about- face for MCI which has focused on telephone services for business, which don't usually include wireless. And it would cut into earnings. Vodafone declined to say whether it would raise its bid if another company made a higher one. Copyright: IOS & Bloomberg
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