Vodafone 2005 Annual Report Download - page 24

Business Overview continued
22 |Business
Portugal
During September 2002, the Group increased its effective interest in its then listed
subsidiary Vodafone Portugal to 61.4% through market purchases.
On 28 February 2003, the Company announced a tender offer to acquire, for cash, all
remaining shares not held by the Group. The Company’s effective interest in Vodafone
Portugal increased to approximately 94.4% as a result of shares purchased in the offer
and in the market. The total aggregate cash consideration paid in the 2003 financial
year was £184 million, with a further £336 million paid in April 2003. Having achieved
an effective interest of greater than 90%, the Company implemented compulsory
acquisition procedures to acquire the remaining shares, which became effective on
21 May 2003, for a further consideration of £74 million. As a result, Vodafone Portugal
became a wholly owned subsidiary of the Group.
Australia
On 3 May 2002, the Group completed the purchase of the 4.5% minority interest in
Vodafone Australia Limited (“Vodafone Australia”), formerly Vodafone Pacific Limited, for
a cash consideration of £43 million, as a result of which Vodafone Australia became a
wholly owned subsidiary.
Hungary
On 23 January 2003, the Group increased its stake in V.R.A.M. Telecommunications
Limited, now called Vodafone Hungary Mobile Telecommunications Limited (“Vodafone
Hungary”), to 83.8% by purchasing RWE Com GmbH & Co OHG’s 15.565% interest in
Vodafone Hungary for an undisclosed cash consideration. Options were granted to
Antenna Hungaria RT (“Antenna”) on 23 January 2003 over certain of the shares
acquired from RWE on this date, representing a maximum interest of 3.89%. All of
these options expired on 9 October 2003, unexercised.
On 10 June 2003, the Group increased its stake in Vodafone Hungary to 87.9% by
subscribing for Antenna’s share of an issue of ‘C’ shares. Antenna’s call options over
5,659,500, 5,072,700 and 7,845,855 Vodafone Hungary ‘C’ shares, relating to equity
injections in October 2001, April 2002 and June 2003 respectively, expired on
9 October 2003 unexercised.
In the first half of the 2005 financial year, the Group subscribed for HUF 89,301 million
(£248 million) shares in Vodafone Hungary, increasing the Group’s stake to 92.8%. On
24 September 2004, the Group entered into a sale and purchase agreement to acquire
the remaining 7.2% shareholding in Vodafone Hungary from Antenna. This transaction
completed on 12 January 2005 with the effect that Vodafone Hungary became a
wholly owned subsidiary of the Group.
Egypt
On 16 May 2003, the Group increased its shareholding in Vodafone Egypt from 60.0%
to 67.0%. Subsequently, the Group has reduced its effective interest in Vodafone Egypt
to 50.1%.
Malta
On 1 August 2003, the Group announced that it had increased its shareholding in
Vodafone Malta Limited (“Vodafone Malta”) from 80% to 100% by purchasing
Maltacom Plc’s 20% interest in Vodafone Malta for cash consideration of €30 million.
UK
On 22 September 2003, the Group acquired 100% of Singlepoint (4U) Limited
(“Singlepoint”) for a consideration of £417 million. In addition, as a result of a
recommended cash offer announced on 5 August 2003, the Group acquired 98.92%
of Project Telecom plc, after the offer was declared unconditional on 19 September
2003, and subsequently acquired the remaining 1.08% in November 2003, for a total
consideration of £164 million. These businesses have been integrated into the Group’s
UK operations.
Vizzavi
On 29 August 2002, the Group acquired Vivendi’s 50% stake in the Vizzavi joint
venture, which operated a mobile content business, for a cash consideration of €143
million (£91 million). As a result of this transaction, the Group owns 100% of Vizzavi,
with the exception of Vizzavi France, which is now wholly owned by Vivendi. Vizzavi
services are now provided under the Vodafone brand.
Associates
SFR and Cegetel
At 1 April 2002, the Group had a 20% direct interest in the French mobile operator
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 €4.0 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 €6.8 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, had 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. (“Cegetel”), a company in
which SFR had a 65% stake, giving the Group an effective interest of 28.5% at that
date. The Group’s interest in SFR remained at approximately 43.9% as a result of this
reorganisation.
On 11 May 2005, SFR announced an agreement to merge its fixed line business,
Cegetel, with neuf telecom, subject to competition and regulatory authority and
employee council approvals. Under the agreement, SFR will purchase SNCF’s 35%
minority interest in Cegetel, according to a pre-existing contract, and then contribute
100% of the capital of Cegetel to neuf telecom. In return, SFR will receive a 28%
interest in the combined entity, neuf Cegetel, together with a €380 million bond to be
issued by neuf Cegetel.
Vodacom
During December 2002, the Group completed the purchase of an additional 3.5%
indirect equity stake in its South African associated undertaking, Vodacom Group (Pty)
Limited (“Vodacom”), for the sterling equivalent of £78 million. The transaction
increased the Group’s effective interest in Vodacom to 35%.