Vodafone 2002 Annual Report Download - page 10

Vodafone Group Plc Annual Report & Accounts and Form 20-F Information on the Company8
had a 26% stake, acquiring a controlling interest of approximately 50% in each
of the existing operating companies, becoming collectively known as the J-Phone
Group. The Group’s effective ownership interests were largely unchanged by this
reorganisation. The nine regional operating companies were subsequently
reorganised into three new regional companies, J-Phone East, J-Phone West and
J-Phone Tokai.
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 Japan Telecom” below,
comprising £3.1 billion for BT’s combined shareholdings of 20% in Japan
Telecom and 20% in J-Phone Communications, with a further £0.6 billion for
BT’s aggregate interest of approximately 4.9% in the J-Phone operating
companies. 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% direct 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
as J-Phone Vodafone, is now approximately 69.7%.
Acquisition of Airtel Móvil S.A. (“Airtel”) On 29 December 2000, the
Company completed its acquisition of a total of 4,061,948 shares in Airtel in
Spain, representing approximately 52.1% of the issued share capital of Airtel.
The acquisition increased the Group’s interest in Airtel to 73.8%. The Company
issued 3,097,446,624 new listed ordinary shares to the transferring Airtel
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 Airtel for a cash consideration of £1.1 billion, increasing
its ownership interest in Airtel to approximately 91.6%. The acquisition was
completed on 29 June 2001, following the receipt of regulatory approval.
Airtel now operates as Vodafone.
On 2 April 2002, the Group’s interest was further increased to 93.8% following
the exercise of a put option held by Torreal, S.A. See note 35 to the Consolidated
Financial Statements, “Subsequent events”, for further details.
Acquisition of an interest in Swisscom Mobile S.A. (“Swisscom Mobile”)
Following receipt of regulatory approvals and the agreement of Swisscom AG’s
shareholders, Vodafone acquired a 25% equity interest in Swisscom Mobile
for CHF4.5 billion (£1.8 billion) during the first calendar quarter of 2001.
The consideration for the 25% stake represented an enterprise value of
approximately £7.3 billion for Swisscom Mobile, including net debt of
£0.2 billion. The Company satisfied the first £0.85 billion tranche of the
consideration by the issue of 422,869,008 new ordinary shares and the
payment of CHF25 million in cash. The second and final tranche of £0.98 billion
was satisfied in cash and was paid in September 2001.
Swisscom Mobile is the largest mobile operator in Switzerland in terms of
registered customers.
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, Vodafone acquired a controlling 66.7% shareholding in the Japanese fixed
line operation Japan Telecom, which is the parent company of J-Phone Co., Ltd.
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.
During the current financial year, in a transaction which completed 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 Airtel, as described above
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%.
Acquisition of an interest 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 16 May 2002, the Group announced that it will be subscribing to a share
issue by China Mobile for $750 million, increasing its ownership from 2.18% to
approximately 3.27%. Further details can be found in note 35 to the
Consolidated Financial Statements, “Subsequent events”.
Acquisition of Eircell 2000 plc On 21 December 2000, eircom plc announced
the proposed demerger of eircom plc’s mobile communications business,
Eircell, to a new company, called Eircell 2000 plc (“Eircell”), and the Company
announced a separate offer for the entire share capital of Eircell. Eircell is the
leading provider of mobile telecommunications services in Ireland, with
1,704,000 customers at 31 March 2002. The offer valued Eircell at
approximately 13.6 billion, including the assumption of 1250 million of net debt.
The offer became unconditional on 13 May 2001, following the receipt of valid
acceptances representing approximately 79.6% of the total shareholding in
Eircell 2000. The offer remained open for acceptance until 27 May 2001 and,
in accordance with Eircell’s Articles of Association, all of Eircell’s shareholders
were deemed to have accepted the offer at that date. The Company issued
Information on the Company continued