Industry
Telefonica deal set to spark rise in EU takeovers
Auteur : Business online
Du : 06/11/2005
SPANISH telecoms operator Telefonica’s £17.7bn (E26bn, $31.5bn) purchase of UK mobile operator O2 will usher in a new era of even bigger takeover deals in Europe between national operators such as France Telecom and Deutsche Telekom (DT).
Gartner research director Martin Gutberlet told The Business: “It is not a question of if these mega-mergers take place but when, although they will not take place before 2006.
“Earlier takeover deals are likely to involve companies such as KPN in the Netherlands and Swisscom, which are both for sale, and other eastern European operators.”
The Telefonica bid triggered a clause in DT’s earlier undertakings to the UK takeover panel that allowed DT to make a counter bid. O2’s share price shot up on newspaper reports last week that DT might do just that. Although interested in O2, Deutsche Telekom’s chief financial officer, Karl-Gerhard Eick, now says he will not try to trump the £17.7bn Spanish cash offer.
But the spotlight will remain firmly on Deutsche Telekom to react to the threat posed to its mobile arm T-Mobile by Telefonica’s takeover of O2. Nomura analyst Mark James said: “We expect speculation to intensify that Deutsche Telekom will make a bid for Virgin Mobile.”
Virgin and the much larger Vodafone will be the two remaining independent UK mobile phone network operators after the purchase of O2. As Vodafone is too big to be taken over by another operator, this has focused attention on Virgin.
The pan-European telecoms feeding frenzy continued last week. Vodafone announced that it plans to buy a further 15% of South Africa’s Vodacom Group for up to $2.4bn to tap growth in Africa’s largest economy. The deal will give Vodafone increased exposure to South Africa, the Democratic Republic of Congo, Tanzania, Lesotho and Mozambique.
Vodafone said it planned to buy all the shares of VenFin, owner of the Vodacom stake, for 47.25 rand each. Vodafone would then sell all VenFin’s assets other than the Vodacom stake. Vodacom had an estimated 17.2m customers, including 14.3m in South Africa at the end of June. Vodacom’s customer growth meanwhile was 39% in the year to the end of June, while revenues rose 20% in the 12 months to the end of March.
News of the Vodafone deal came hard on the heels of reports that Swisscom was in talks to acquire Irish operator Eircom for around E3bn. Talks were said to be at an early stage and although Eircom confirmed it has been approached, it refused to name Swisscom as the suitor.
Vodafone also recently announced an £820m deal to acquire 10% of Bharti Tele-Ventures (BTVL), India’s leading mobile operator. Announcing the deal, Vodafone chief executive Arun Sarin said Vodafone is keen to extend its footprint into new markets. Vodafone also agreed to sell its 100% interest in Vodafone Sweden to Telenor, the pan-Nordic telecommunications operator for £704m, indicating a shift from highly developed markets such as Scandinavia to developing ones.
Telefonica has attracted investor criticism that it chose to make a massive debt-funded cash offer for a player like O2 which operates in the mature markets of Northern Europe rather than investing in developing markets. But Telefonica already has extensive operations in Latin America and the O2 takeover has enabled it to increase its footprints.
After the acquisition of O2 is complete, Telefonica will have ousted Deutsche Telekom’s mobile arm T-Mobile from its slot as the world’s second largest operator. Now the only company that stands in the way of Telefonica becoming the world’s number one is Vodafone.
Gartner research director Martin Gutberlet told The Business: “It is not a question of if these mega-mergers take place but when, although they will not take place before 2006.
“Earlier takeover deals are likely to involve companies such as KPN in the Netherlands and Swisscom, which are both for sale, and other eastern European operators.”
The Telefonica bid triggered a clause in DT’s earlier undertakings to the UK takeover panel that allowed DT to make a counter bid. O2’s share price shot up on newspaper reports last week that DT might do just that. Although interested in O2, Deutsche Telekom’s chief financial officer, Karl-Gerhard Eick, now says he will not try to trump the £17.7bn Spanish cash offer.
But the spotlight will remain firmly on Deutsche Telekom to react to the threat posed to its mobile arm T-Mobile by Telefonica’s takeover of O2. Nomura analyst Mark James said: “We expect speculation to intensify that Deutsche Telekom will make a bid for Virgin Mobile.”
Virgin and the much larger Vodafone will be the two remaining independent UK mobile phone network operators after the purchase of O2. As Vodafone is too big to be taken over by another operator, this has focused attention on Virgin.
The pan-European telecoms feeding frenzy continued last week. Vodafone announced that it plans to buy a further 15% of South Africa’s Vodacom Group for up to $2.4bn to tap growth in Africa’s largest economy. The deal will give Vodafone increased exposure to South Africa, the Democratic Republic of Congo, Tanzania, Lesotho and Mozambique.
Vodafone said it planned to buy all the shares of VenFin, owner of the Vodacom stake, for 47.25 rand each. Vodafone would then sell all VenFin’s assets other than the Vodacom stake. Vodacom had an estimated 17.2m customers, including 14.3m in South Africa at the end of June. Vodacom’s customer growth meanwhile was 39% in the year to the end of June, while revenues rose 20% in the 12 months to the end of March.
News of the Vodafone deal came hard on the heels of reports that Swisscom was in talks to acquire Irish operator Eircom for around E3bn. Talks were said to be at an early stage and although Eircom confirmed it has been approached, it refused to name Swisscom as the suitor.
Vodafone also recently announced an £820m deal to acquire 10% of Bharti Tele-Ventures (BTVL), India’s leading mobile operator. Announcing the deal, Vodafone chief executive Arun Sarin said Vodafone is keen to extend its footprint into new markets. Vodafone also agreed to sell its 100% interest in Vodafone Sweden to Telenor, the pan-Nordic telecommunications operator for £704m, indicating a shift from highly developed markets such as Scandinavia to developing ones.
Telefonica has attracted investor criticism that it chose to make a massive debt-funded cash offer for a player like O2 which operates in the mature markets of Northern Europe rather than investing in developing markets. But Telefonica already has extensive operations in Latin America and the O2 takeover has enabled it to increase its footprints.
After the acquisition of O2 is complete, Telefonica will have ousted Deutsche Telekom’s mobile arm T-Mobile from its slot as the world’s second largest operator. Now the only company that stands in the way of Telefonica becoming the world’s number one is Vodafone.