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Vodafone tipped to buy Mannesmann

AirTouch deal puts UK mobile giant in strong position

Merger mania could be about to hit the European mobile telephony industry, with speculation mounting that Vodafone AirTouch is to make a bid for the German mobile provider Mannesmann. According to a number of recent reports, analysts have tipped the deal as an almost inevitable outcome of continuing consolidation within the European mobile market. Mannesmann looks vulnerable as none of its shareholders controls a large enough slice of the company to ward off hostile bids. Since merging with AirTouch at the end of June, Vodafone is now well placed to make a move on Mannesmann. The two are already partners in a number of European mobile carriers, including Mannesmann Mobilfunk, the number one in the German market. The AirTouch deal has given Vodafone a market capitalisation of $127 billion, which should mean swallowing Mannesmann (market cap - £59 billion) would be straightforward. With a market capitalisation of $127 billion, Vodafone certainly could afford to buy Mannesmann, which is much smaller at $59 billion. Newswire service Reuters spoke to a number of industry analysts and speculated that in the event of Mannesmann becoming the target of a hostile bid, Vodafone could step in to fend off the challenge by presenting a more agreeable bid of its own. ®

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