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New Bid Made for Mannesmann Spinoff

April 5, 2000

MUNICH, Germany (AP) _ Siemens AG and Robert Bosch GmbH made a surprise joint bid today to acquire Mannesmann AG’s automotive and engineering spin-off for $8.7 billion, topping the unsolicited bid made by ThyssenKrupp AG last week.

The Siemens-Bosch offer for Atecs Mannesmann AG came hours before Mannesmann’s supervisory board was to meet to discuss what to do with the unit, which it had been planning to bring to the market with an initial public offering this summer.

A Mannesmann spokesman said he expected all offers to be discussed at the board meeting in Duesseldorf. He declined to say whether a decision was expected.

ThyssenKrupp’s $8.4 billion bid initially angered Mannesmann, which itself is being acquired by British telecommunications giant Vodafone Airtouch PLC for $180 billion in the biggest corporate takeover yet.

Even before the Vodafone deal, Mannesmann had planned to spin off Atecs to concentrate on its own, highly profitable and fast-growing telecommunications business. Its managers have said they would prefer Atecs to remain independent.

Vodafone has declined to comment on the offers for Atecs because it has not yet taken full control of Mannesmann.

However, Mannesmann’s supervisory board probably would not want to ignore Vodafone’s wishes in its decision. Analysts have said Vodafone would probably be able to get more for the division by selling it to a single buyer than by selling stock in a public offering.

Thyssen Krupp declined to comment on the counterbid Atecs, but said it believes its offer is the better strategic fit.

Analysts questioned the logic of the Siemens-Bosch bid, especially since Siemens managers have been trying to slim down the massive electronics and engineering conglomerate ahead of a planned listing on the New York Stock Exchange next year.

``I thought Siemens was looking for ways to exit this business,″ said Alfred Schoengraf, analyst at Delbrueck Asset Management, a sentiment echoed by other Siemens analysts. The Atecs automotive unit, VDO, ``is OK,″ he said, ``but I don’t know what they (Siemens) want with the rest.″

The situation is further complicated because Atecs is already planning a joint venture for VDO with Siemens.

ThyssenKrupp has said its offer is only valid if VDO is included. While ThyssenKrupp says it would be willing to cooperate in the venture with Siemens after acquiring VDO, Siemens has said no to this proposal.

In today’s statement, Siemens said that it and Bosch want to continue operating Atecs on a parity basis as a joint venture and further develop the business by folding in their own related activities.

The new company would be a significant force on the world engineering and technology market, it said, adding that it hoped to wrap up negotiations as quickly as possible.

Its bid came amid rising speculation of the Bavarian government’s involvement in Atecs’ future since most of Atecs’ businesses are located in the southern German state.

Siemens, based in the Bavarian capital of Munich, denied it had been pressured into the bid by the state government.

The Bavarian Economics Ministry issued a statement saying it favored Atecs’ initial public offering plans, and is counting on Vodafone to act according to Mannesmann’s wishes.

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