German conglomerate Mannesmann AG yesterday said it will speed up its plan to split into two separate companies, as part of its response to a hostile takeover bid from Vodafone AirTouch.
Separately, the Düsseldorf-based conglomerate yesterday also released its earnings for the first nine months of 1999, which showed that its mobile phone activities are its greatest profit generator.
Mannesmann's Supervisory Board has approved a suggestion to move up the initial public offering of Mannesmann's engineering and automotive group to mid-2000, the company said in a statement. Mannesmann will only retain half of the shares of the new engineering and automotive company, instead positioning itself as a telecommunications company, the statement said.
The move will leave Mannesmann with interests such as mobile carrier Mannesmann Mobilfunk GmbH, fixed-line carrier Mannesmann Arcor, Italian carriers Omintel-Pronto Italia and Infostrada, and the UK's Orange, which Mannesmann is in the process of acquiring. Mannesmann shareholders must still approve the move at the next shareholders' meeting, the statement said.
Originally, Mannesmann planned to make these moves first in 2001. But two successive, unwanted bids from UK mobile carrier Vodafone last week have put the German conglomerate under pressure to speed up its plans.
Reporting earnings for the first nine months of 1999, Mannesmann said profit from ordinary activities totalled 1.1 billion euros ($US1.1 billion), up from 1 billion euros in 1998. Nearly all of the profit, or 1.06 billion euros, came from the company's telecommunications businesses, Mannesmann said.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) of Mannesmann's telecommunications activities grew 71 percent to 1.6 billion euros, up from 931 million euros in the corresponding period last year.
The profit growth from telecommunications came solely from the mobile phone business, in particular from Mannesmann increasing its stake in Italian mobile operator Omnitel in mid-1999, Mannesmann said. Fixed-line activities showed an adjusted EBITDA loss of 164 million euros, which reflects their "startup" situation, Mannesmann said.
Mannesmann released no information about its revenue in the first nine months of 1999.