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.
Investor Meets Company
UK 100