Internet and Telecoms Alliance with Vivendi
Vodafone AirTouch PLC
30 January 2000
PART I
Vodafone AirTouch and Vivendi to Establish
Internet and Telecoms Alliance
* Vodafone AirTouch and Vivendi have agreed to establish a
new 50/50 Internet company (the 'Company') to develop
and operate a branded Multi Access Portal in Europe.
* The European Multi Access Portal will have a seamless
interface with Vodafone AirTouch's global Internet
platform.
* It is intended that the Company will also become an 80%
investor in an early stage 'wireless Internet' fund to
be established together with SoftBank, which will hold
the remaining 20% of the fund.
* Vodafone AirTouch and Vivendi will explore ways of
extending cooperation between their respective mobile
operations.
* Vodafone AirTouch and Vivendi have agreed on a joint
initiative to consider the development of a single pan-
European fixed-line network business by pooling the
fixed network interests of Vivendi and those that
Vodafone AirTouch will acquire through Mannesmann.
* Vodafone AirTouch has agreed that if it is successful in
acquiring control of Mannesmann, it will procure the
sale to Vivendi, for fair value in cash, of an
additional 7.5% economic interest in Cegetel.
* The letter of intent is subject to Vodafone AirTouch
acquiring more than 50% of Mannesmann.
Jean Marie Messier, Chief Executive of Vivendi, commented:
'I am extremely happy with this agreement, which will enable
us to accelerate dramatically the emergence of Europe's
first company of the Second Generation Internet Age.'
'It is an ideal alliance between two partners with highly
complimentary profiles, and it comes at just the right
moment. The Internet world is about to experience a high-
speed technology revolution that will eventually allow even
the most sophisticated content to be transmitted to devices
of every type. '
'The Internet is going to become the major mass media of the
years to come. This alliance, which creates the largest
customer base in Europe and brings together the best in
Internet skills, is the greatest partnership we could ever
imagine to enter this new era.'
Chris Gent, Chief Executive of Vodafone AirTouch, commented:
'This alliance positions Vodafone AirTouch and Vivendi to
develop one of Europe's leading Internet businesses. The new
Internet Company will largely complete the European coverage
for our global Internet platform in addition to providing us
with exclusive access to additional high quality content and
services. It also creates the opportunity to establish a
broader fixed-line group in three of Europe's leading
markets.
'This is another important step in achieving our objective
to become the world's leading mobile multimedia operator.'
Enquiries:
Vivendi
Alain Delrieu, Press Relations
Antoine Lefort, Press Relations
Ariane de Lamaze
Tel: +33 (0)1 7171 1084
Vodafone AirTouch
Terry Barwick, Director of Corporate Affairs
Tim Brown, Investor Relations Director
Melissa Stimpson, Senior Investor Relations Manager
Mike Caldwell, Corporate Communications Director
Tel: +44 (0)1635 33 251
Goldman Sachs International
Scott Mead
Simon Dingemans
Tel: +44 (0)171 774 1000
Warburg Dillon Read
Warren Finegold
Mark Lewisohn
Tel: +44 (0)171 567 8000
Tavistock Communications
Lulu Bridges
William Cooper
Tel: +44 (0) 171 600 2288
Part II
Vodafone AirTouch and Vivendi to Establish
Internet and Telecoms Alliance
Internet Joint Venture - Multi Access Portal
Vodafone AirTouch and Vivendi have agreed to create a 50/50
Company to establish a Multi Access Portal for the European
markets. To that effect they have signed a letter of intent
in which they undertake to negotiate a detailed contract, on
an exclusive basis, to be signed before 30 June 2000. This
letter of intent is subject to Vodafone AirTouch acquiring
more than 50% of Mannesmann through its current offer for
Mannesmann.
Vodafone AirTouch believes that mobile data and Internet
services represent the biggest growth opportunity of this
decade. In order to exploit this opportunity, it has
recently announced the launch of its single global platform
for mobile data and Internet, which will provide a world-
class mobile data and Internet capability.
The agreement with Vivendi being announced today will allow
Vodafone AirTouch to enhance its overall global Internet
offering while significantly accelerating the development of
its European Internet business. It will also enable
Vodafone AirTouch to expand its participation in the
important French telecom market.
Vivendi is one of Europe's leading Internet and media
players, with the potential to provide both Internet and
multimedia content as well as access to SFR's 7.3 million
subscribers and Canal+'s 14 million subscribers around
Europe. Vivendi's strategy has long been on convergence
between content and access to customers. The alliance with
Vodafone AirTouch allows Vivendi to extend significantly the
reach of its Internet content and services to a combined
potential of almost 70 million subscribers in Europe.
The Multi Access Portal will provide customers with a
seamless environment across different platforms (e.g.
television, personal computers, mobile and fixed handsets,
and personal data appliances) for web-based personal
communication services, e-commerce and entertainment.
Vodafone AirTouch's global Internet platform will also
benefit from Vodafone AirTouch's existing partnership
services and content agreements. In addition, it will
provide its customers with exclusive access to high quality
content and services from Vivendi companies including VNet,
Canal+ and Havas.
The new Internet Company is expected to provide both
Vodafone AirTouch and Vivendi with significant advantages in
developing their respective Internet businesses. In
particular the new Company will benefit from:
* a large and diverse customer base of almost 70 million
subscribers, the majority of whom are expected to be
active users of the Internet through interactive TV,
mobile or PC based access devices
* a broad range of existing partnerships and proprietary
content will enable the new Company to offer highly
attractive and superior services
* strong technical expertise and experience across the
major access technologies: mobile (GPRS, UMTS), fixed
(ADSL, Cable) and satellite
* proven expertise in content aggregation in mobile, fixed
and PC based Internet services
* European leadership in interactive services in the
fields of entertainment (games, movies, sport),
education and professional services (medical,
employment)
Vodafone AirTouch and Vivendi believe that the Multi Access
Portal will become the portal of choice for content
providers across Europe, allowing each of them to offer
their customers superior Internet and e-commerce services.
The Multi Access Portal will be the exclusive portal for all
the Vodafone AirTouch and Vivendi subsidiaries in Europe.
The Company will facilitate cross-marketing through the
personalised interface established directly with customers.
The Company and its services will be marketed exclusively
under a new commercial brand which will be announced in the
next few months.
Vodafone AirTouch and Vivendi have agreed that the gross
margin generated by web-based services delivered through the
Multi Access Portal will be split equally between the new
Company and the relevant access provider, with 100% of the
access, airtime or Pay TV subscription revenues retained by
the access provider.
It is intended that the new Company will become an 80%
investor in a new early stage 'wireless Internet' fund, to
be established with SoftBank, which will hold the remaining
20%. It is envisaged that the fund will be capitalised at
between 100 and 150 million Euros.
Mobile Cooperation
Vodafone AirTouch and Vivendi will explore ways in which
they can extend the cooperation between SFR, the second
largest mobile operator in France, and the Vodafone AirTouch
group. This mobile cooperation between SFR and Vodafone
AirTouch is designed to enhance the services available to
customers as well as generating synergies from areas
including:
* Cost savings (e.g. infrastructure purchasing)
* Revenue enhancements (e.g. roaming)
* Product development (e.g. common platform developments)
Pooling of Fixed Line Networks
If Vodafone AirTouch's Offer for Mannesmann is successful,
Vodafone AirTouch and Vivendi will explore ways in which the
existing fixed network interests of Mannesmann in France,
Germany and Italy and Vivendi's fixed network interests in
France might be combined into a single pan-European fixed-
line group.
The creation of this business and its structure will be
subject to a satisfactory review of the tax implications on
Vodafone AirTouch and Vivendi, the agreement of other
shareholders and the approval of applicable competition
authorities. Vodafone AirTouch and Vivendi will examine the
possible flotation of such businesses.
Acquisition of 7.5% Stake in Cegetel by Vivendi
Vodafone AirTouch has agreed that if its Offer for
Mannesmann is successful, it will, subject to relevant law,
procure that Mannesmann sells to Vivendi for fair value in
cash an additional 7.5% economic interest in Cegetel.
Mannesmann currently holds a 15% interest in Cegetel.
Standstill Agreement
As part of the arrangements, Vodafone AirTouch has agreed
not to acquire interests in Vivendi without the approval of
the Vivendi Board for a period of three years. This
obligation will cease in the event that: Vodafone AirTouch's
Offer for Mannesmann is withdrawn; a third party bids for
Vivendi; a third party acquires more than 15% of Vivendi;
and in certain other circumstances.
Notes to Editors:
Cegetel
Cegetel is a mobile and fixed-line telecoms operator in
France. Its ownership is currently: Vivendi 44%; BT 26%;
Mannesmann 15%; SBC 15%. Cegetel owns an 80% interest in
SFR (see below). Cegetel has 8.7 million customers in
France, of which 7.3 million are in SFR.
SFR (Societe Francaise du Radiotelephone)
SFR is the second largest mobile operator in France. It is
owned 80% by Cegetel and 20% by Vodafone AirTouch. SFR has
7.3 million customers in France.
Copies of this press release and the documentation published
in connection with the Vodafone AirTouch Offer for
Mannesmann (the 'Offer') can be obtained from the Vodafone
AirTouch website, www.vodafone-update.com.
Enquiries:
Vivendi
Alain Delrieu, Press Relations
Antoine Lefort, Press Relations
Ariane de Lamaze
Tel: +33 (0)1 7171 1084
Vodafone AirTouch
Terry Barwick, Director of Corporate Affairs
Tim Brown, Investor Relations Director
Melissa Stimpson, Senior Investor Relations Manager
Mike Caldwell, Corporate Communications Director
Tel: +44 (0)1635 33 251
Goldman Sachs International
Scott Mead
Simon Dingemans
Tel: +44 (0)171 774 1000
Warburg Dillon Read
Warren Finegold
Mark Lewisohn
Tel: +44 (0)171 567 8000
Tavistock Communications
Lulu Bridges
William Cooper
Tel: +44 (0)171 600 2288
Words defined in the press release dated 18 January 2000
shall have the same meaning in this announcement unless the
context requires otherwise.
This press release does not constitute an offer to exchange
or sell or an offer to exchange or buy any securities.
The contents of this announcement have been approved by
Goldman Sachs International and Warburg Dillon Read, the
investment banking division of UBS AG, solely for the
purposes of Section 57 of the Financial Services Act 1986.
Goldman Sachs International and Warburg Dillon Read, each of
which is regulated in the United Kingdom by The Securities
and Futures Authority Limited, are acting for Vodafone
AirTouch and for no one else in connection with the new
Company to be created with Vivendi and the Offer and will
not be responsible to anyone other than Vodafone AirTouch
for providing the protections afforded to customers of
Goldman Sachs International or Warburg Dillon Read or for
giving advice in relation to the Company and the Offer.
The Offer in the United States is being made through a
prospectus which is part of an effective registration
statement filed with the U.S. Securities and Exchange
Commission. Mannesmann Shareholders who are U.S. persons or
are located in the United States are advised to read the
registration statement because it contains important
information relating to the Offer. You can inspect and copy
the registration statement relating to the Offer and
documents incorporated by reference therein at the public
reference facilities maintained by the U.S. Securities and
Exchange Commission at 450 Fifth Street, N.W., Room 1024,
Washington D.C. 20549. In addition, copies of the US Offer
Document are available from The Bank of New York, 101
Barclay Street, Lobby Window, New York, NY 10286.
For additional information regarding risks, see the
Registration Statement on Form F-4 and other reports of
Vodafone AirTouch Plc on file with the Securities and
Exchange Commission. Copies of these filings are available
on request directed to Vodafone AirTouch, Investor
Relations, Tim Brown (tel: + 44 1635 682 373).
It is the responsibility of any person receiving a copy of
this announcement in any jurisdiction other than the United
Kingdom, Germany and the United States to satisfy themselves
as to the full observance of the laws and regulatory
requirements of the relevant jurisdiction, including the
obtaining of any governmental or other consent which may be
required or observing any other formalities needing to be
observed in such jurisdiction. Receipt of this announcement
will not constitute an offer in those jurisdictions in which
it would be illegal to make such an offer and in such
circumstances it will be deemed to have been sent for
information purposes only.
Statements in this press release relating to future status
or circumstances, including statements regarding future
performance, costs, revenues, cash flows, earnings,
divestments, growth and other trend projections and the
synergistic benefits of the merger are forward-looking
statements. These statements may generally, but not always,
be identified by the use of words such as 'anticipates',
'should', 'expects', 'estimates', 'believes', or similar
expressions. By their nature, forward-looking statements
involve risk and uncertainty because they relate to events
and depend on circumstances that will occur in the future.
There can be no assurance that actual results will not
differ materially from those expressed or implied by these
forward-looking statements due to many factors, many of
which are outside Vodafone AirTouch's control, including
steps that Mannesmann's management may take to frustrate
Vodafone AirTouch's efforts to obtain managerial control of
Mannesmann, increase the costs or reduce the benefits of the
transaction, the triggering of change of control provisions
in Mannesmann's licences or other agreements, the ability to
obtain regulatory approvals without onerous conditions, the
impact of labour disputes, the risk of negative impacts on
Vodafone AirTouch's credit ratings, the potential costs,
including tax costs, of divesting Orange and Mannesmann's
industrial businesses, limitations on Vodafone AirTouch's
ability to control Mannesmann due to voting restrictions and
other provisions of Mannesmann's charter and German law,
general economic conditions, competition, technical
difficulties and the need for increased capital expenditure
(such as that resulting from increased demand for usage, new
business opportunities and deployment of new technologies),
the ability to realise benefits from entering into
partnerships for developing data and internet services, and
the inability of Vodafone AirTouch and Vivendi to agree the
detailed terms for the Company.