Vodafone 2004 Annual Report Download - page 19

Annual Report 2004 Vodafone Group Plc
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On 12 April 2001, the acquisition of a 15% stake in Japan Telecom, the controlling
shareholder of the J-Phone Group, 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 2 May 2001, the Company announced that it had agreed to acquire, for a cash
consideration of approximately £3.7 billion, BT Group plc’s (“BT’s”) ownership interests
in the J-Phone Group and Japan Telecom, 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.
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.
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 Co., Ltd and Japan Telecom.
The Group has sold its interest in Japan Telecom, as described under “Sales of
Businesses”. In addition, J-Phone Co., Ltd was renamed Vodafone K.K. (“Vodafone
Japan”) on 1 October 2003 and Japan Telecom Holdings Co., Ltd. was renamed
Vodafone Holdings K.K. on 10 December 2003.
At 31 March 2004, the Group held, through its wholly owned subsidiary undertakings,
a 66.7% stake in Vodafone Holdings K.K., and a 39.67% stake in Vodafone Japan. In
addition Vodafone Holdings K.K. held 45.08% of the issued share capital in Vodafone
Japan, making the Group’s effective interest in Vodafone Japan 69.7%.
Acquisition of additional interests in Vodafone Spain
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 a2.0 billion (£1.4 billion) following
the 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 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 S.A.S. (“Cegetel”)
As at 1 April 2001, the Group had a 20% direct interest in SFR and an approximate
15% interest in Cegetel Groupe S.A. (“Cegetel Group”), the French
telecommunications group and the remaining 80% shareholder in SFR, making the
Group’s effective interest in SFR approximately 31.9%.
On 16 October 2002, the Group announced that it had agreed to acquire BT’s 26%
interest in Cegetel Group and SBC Communications, Inc.’s (“SBC’s”) 15% interest in
Cegetel Group for a4.0 billion cash and $2.27 billion cash, respectively. Vivendi
Universal S.A. (“Vivendi”) had pre-emption rights in connection with the Cegetel Group
shares held by SBC and BT. At the same time, the Group announced that it had made
a non-binding cash offer of a6.8 billion to Vivendi for its 44% interest in Cegetel
Group.
On 29 October 2002, the Board of Vivendi announced it had decided not to accept the
Group’s offer to purchase its 44% interest in Cegetel Group and, accordingly, the offer
lapsed. On 3 December 2002, Vivendi also announced its intention to exercise its pre-
emption rights to acquire BT’s 26% interest in Cegetel Group.
On 21 January 2003, the Company announced that its subsidiary, Vodafone Holding
GmbH, completed the acquisition of SBC’s 15% interest in Cegetel Group for a cash
consideration of $2.27 billion (£1.4 billion), increasing the Group’s effective interest in
SFR to approximately 43.9%.
In December 2003, in order to optimise cash flows between Cegetel Group and its
shareholders, SFR was merged into Cegetel Group and this company was renamed
SFR. The fixed line businesses Cegetel S.A. and Télécom Développement, previously
controlled by SNCF, were merged to form Cegetel S.A.S., a company in which SFR has
a 65% stake, giving the Group an effective interest of 28.5%. The Group’s interest in
SFR remained at approximately 43.9% as a result of this reorganisation.
Other significant transactions
Purchase of additional minority stakes in existing subsidiary undertakings
In line with the Group’s strategy of increasing its shareholding in existing operations
where it believes opportunities arise to enhance value for the Company’s
shareholders, the Group purchased minority stakes in certain of the Group’s subsidiary
undertakings in order to be able to more closely align the respective businesses to the
Group’s business.
Europolitan Vodafone AB (“Vodafone Sweden”)
During September 2002, the Group increased its effective interest in its then listed
subsidiary Vodafone Sweden by 3.6% to 74.7% through a series of market purchases.