Vodafone 2003 Annual Report Download - page 6

Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003
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INFORMATION ON THE COMPANY Continued
On 2 May 2001, the Company announced that it had agreed to acquire, for a
cash consideration of approximately £3.7 billion, BT’s ownership interests in the
J-Phone Group and Japan Telecom, see “Acquisition of interests in Japan
Telecom”below, comprising BT’s combined shareholdings of 20% in Japan
Telecom and 20% in J-Phone Communications for £3.1 billion, and BT’s
aggregate interest of approximately 4.9% in the J-Phone operating companies
for a further £0.6 billion. The transaction completed on 1 June 2001, except for
the acquisition of BT’s interests in the operating subsidiaries of J-Phone
Communications, which did not complete until 12 July 2001. As a result of these
transactions, the Group had a 46% interest in J-Phone Communications, not
including its indirect interest through Japan Telecom, and interests of 18.9%,
15.2% and 14.9%, respectively, in J-Phone Communications’ regional mobile
companies J-Phone East, J-Phone West and J-Phone Central, excluding the
Company’s indirect interests through Japan Telecom’s and J-Phone
Communications’ holdings in these companies. On 24 August 2001, the
Company announced the proposed merger of J-Phone Communications and the
J-Phone operating companies into a new company, J-Phone Co., Ltd.
The merger became effective on 1 November 2001 and, as a result, the Group
held a 39.67% ownership interest in the new company. Finally, following
completion of the Group’s tender offer for Japan Telecom, described below, the
Group’s effective interest in the J-Phone Group, which has since been rebranded
and now operates as J-Phone Vodafone, is now approximately 69.7%.
Acquisition of interests in Japan Telecom
During the two year period ended 31 March 2002, as a result of a series of
separate transactions, described below, the Group acquired a controlling 66.7%
shareholding in the Japanese fixed line operator Japan Telecom.
An initial payment of ¥124.6 billion (£0.7 billion) was made on 31 January 2001
and, following the second payment of ¥125.1 billion (£0.8 billion) on 12 April
2001, the acquisition of a 15% stake in Japan Telecom from West Japan Railway
Company and Central Japan Railway Company was completed. On 27 April
2001, the Group completed the acquisition of a further 10% stake in Japan
Telecom from AT&T Corporation for a cash consideration of $1.35 billion
(£0.9 billion), bringing the Group’s interest in Japan Telecom to 25% at that time.
On 1 June 2001, the Company acquired a further 20% interest in Japan
Telecom from BT. The acquisition was part of a transaction that also resulted in
the Company acquiring a further interest in the J-Phone Group and Vodafone
Spain, as described above and below under their respective headings. On
20 September 2001, the Company announced an agreed tender offer by its
subsidiary, Vodafone International Holdings B.V., to acquire up to 693,368 Japan
Telecom ordinary shares, representing 21.7% of the ordinary shares of Japan
Telecom, for a cash consideration of up to ¥312 billion (£1.8 billion). The offer
successfully completed in October 2001, bringing the Group’s total interest
to 66.7%.
On 31 July 2002, Japan Telecom announced that it had established a wholly
owned subsidiary, Japan Telecom Co., Ltd., and that Japan Telecom was to be
renamed Japan Telecom Holdings Co., Ltd. The existing fixed line business was
transferred to Japan Telecom Co., Ltd. All of these changes took effect from
1 August 2002. This created a telecommunications service group comprising two
core businesses of mobile and fixed telecommunications, namely J-Phone
Vodafone and Japan Telecom.
The Group is currently in discussions that may or may not lead to a disposal of
the Japan Telecom fixed line operations.
Acquisition of Vodafone Spain
On 29 December 2000, the Company completed its acquisition of a total of
4,061,948 shares in Vodafone Spain, representing approximately 52.1% of the
issued share capital of Vodafone Spain. The acquisition increased the Group’s
interest in Vodafone Spain to 73.8%. The Company issued 3,097,446,624 new
listed ordinary shares to the transferring shareholders, representing a value of
approximately £7.9 billion for the acquired shares.
On 2 May 2001, the Company announced that it had agreed to acquire BT’s
17.8% shareholding in Vodafone Spain for a cash consideration of £1.1 billion,
increasing its ownership interest in Vodafone Spain to approximately 91.6%. The
acquisition was completed on 29 June 2001, following the receipt of regulatory
approval.
On 2 April 2002, the Company acquired a further 2.2% interest in Vodafone
Spain for £0.4 billion, following the exercise of a put option held by Torreal, S.A.,
increasing the Group’s interest to 93.8%.
On 21 January 2003, the Company announced that it had acquired the
remaining 6.2% interest in Vodafone Spain for approximately 12.0 billion (£1.4
billion) following the deemed exercise of a put option held by Acciona, S.A. and
Tibest Cuatro, S.A. under the terms of an agreement originally made in January
2000. The transaction completed on 27 January 2003 at which time Vodafone
Spain became a wholly owned subsidiary of the Group.
Acquisition of interests in China Mobile (Hong Kong) Limited (“China
Mobile”)
In an offering that closed on 3 November 2000, the Group acquired newly issued
shares representing approximately 2.18% of China Mobile’s share capital for a
cash consideration of $2.5 billion. On 27 February 2001, the Company and
China Mobile signed a strategic alliance agreement, setting out the principal
terms for a strategic alliance and co-operation between the two parties in mobile
services, technology, operations and management.
On 18 June 2002, the Group invested a further $750 million (£513 million) in
China Mobile and obtained the right to appoint a non-executive director to the
China Mobile board. The Group’s stake in China Mobile increased to
approximately 3.27% as a result of this transaction.
Acquisition of interests in Société Française du Radiotéléphone (“SFR”)
and Cegetel Groupe S.A. (“Cegetel”)
Prior to the acquisition of Mannesmann, the Group had a 20% interest in SFR.
Through the acquisition of Mannesmann, the Group acquired an approximate
15% interest in Cegetel, the French telecommunications group and the
remaining 80% shareholder in SFR, taking the Group’s effective interest in SFR
to approximately 31.9%.
On 16 October 2002, the Group announced that it had agreed to acquire BT’s
26% interest in Cegetel and SBC Communications Inc.’s (“SBC’s”) 15% interest
in Cegetel for 14.0 billion cash and $2.27 billion cash, respectively. Vivendi
Universal S.A. (“Vivendi”) had preemption rights in connection with the Cegetel
shares held by SBC and BT. At the same time, the Group announced that it had
made a non-binding cash offer of 16.8 billion to Vivendi for its 44% interest in
Cegetel.