Mannesmann to Split Telecommunications, Engineering Into 2 Separate Units
By Sonja Heizmann
Mannesmann to Split Into Telecoms, Engineering Units (Update1)
(Adds analyst quote in 4th paragraph, detail throughout.)
Dusseldorf, Sept. 23 (Bloomberg) -- Mannesmann AG, the
engineering company that owns Germany's biggest mobile phone
network, said it will split off its telecommunications unit into
a new company next year so the two businesses can grow
separately.
The telecommunications operation, which was set up in 1992,
posted sales of 4.65 billion euros last year. The remainder of
the company, the automotive and engineering units, together had
sales of 12 billion euros.
Mannesmann, which started life as the inventor of the
seamless steel tube, has become the biggest competitor of former
monopoly Deutsche Telekom AG in the German phone market. Earlier
this year, Mannesmann bought Otelo's fixed line business from RWE
AG and Veba AG as well as Olivetti SpA's stake in Omnitel and
Infostrada.
``This step is Mannesmann's preparation for a link with
Vodafone AirTouch,' said Frank Wellendorf, an analyst at WestLB
Panmure in Dusseldorf, who rates the stock ``outperform.' He
expects Vodafone AirTouch Plc., the world's largest wireless
phone service operator, to take over Mannesmann's phone unit.
``The two companies' geographical positioning makes them ideal
partners.'
The company's shares surged as much as 11 euros, or 7.8
percent, to 151.9 euros.
Mannesmann's units will have separate stock exchange
listings from 2001 and it expects both to be part of Germany's
benchmark DAX 30 index, it said.
The split-up plan has been submitted to the supervisory
board, Mannesmann said, and a decision is expected at the
beginning of next year. From the end of next year, the two units
will be managed separately, it said. |
