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EU May OK Vodafone-Mannesmann Deal

April 12, 2000

BRUSSELS, Belgium (AP) _ The European Union Commission cleared Vodafone Airtouch PLC’s purchase of Germany’s Mannesmann AG on condition that it divest the British mobile phone unit Orange and related units.

The commission announcement Wednesday said Vodafone has agreed and will begin the divestiture immediately. Vodafone agreed to pay $180 billion for Mannesmann in the biggest corporate takeover yet.

In another concession, the two companies will allow other mobile telephone companies to use their network for three years.

In a statement, the commission said that after the acquisition Vodafone would have an extended network which would ``enable it to provide seamless pan-European mobile telecommunication services to corporate customers.″

The commission said it had received a ``significant number″ of complaints and found during the course of its investigation that other mobile operators would not be in a position to provide the same type of services on a pan-European basis.

The commission also said that in the short to medium term it would be difficult for Vodafone competitors to replicate the network of Vodafone and Mannesmann through mergers or other agreements.

Therefore Vodafone had to submit ``a set of substantial undertakings″ aimed at giving other mobile operators the possibility to provide advanced pan-European services to their customers.

But that condition has been limited to a period of three years due to the fast development of the mobile telecom sector, the award of third-generation mobile company licenses and the likely emergence of alternative infrastructures, the commission said.

``In the meantime these undertakings will prevent the emergence of a dominant position for the provision of these services,″ the commission said.

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