MUNICH (03/02/2000) - Mannesmann AG today said it sold on the stock market its 2 percent stake in Italian IT company Olivetti SpA for 420 million euros (US$409 million).
Mannesmann sold the share because it is no longer of strategic importance, the company said in a statement today. It took advantage of the recent upswing in Olivetti's share price to sell the shares, the proceeds from which will be used to pay off debt.
Mannesmann acquired its small stake in Olivetti in 1997, a result of a telecommunications joint venture with Olivetti called Oliman Holding NV, which gave it interests in mobile phone carrier Omnitel Pronto Italia SpA and fixed-line carrier Infostrada SpA.
In June 1999, the German conglomerate agreed to purchase from Olivetti the rest of Omnitel and increased its share in Infostrada to 50 percent. After that, the stake in Olivetti was thus no longer of strategic importance, Mannesmann said.
That arrangement was struck so that Olivetti could remove conflicts of interest standing in the way of its bid for carrier Telecom Italia SpA. [See "With Olivetti's Success, Whither Deutsche Telekom?" May 25, 1999.] Mannesmann -- itself in the process of being merged with U.K.-based mobile carrier Vodafone AirTouch PLC -- is likely to keep its shares in Omnitel and Infostrada. Omnitel fits into Vodafone's strategy of increasing its global mobile presence, and Vodafone said in its merger agreement that it would let Mannesmann keep its interests in its fixed-line carriers, Infostrada and German carrier Mannesmann Arcor AG & Co.
In mid-morning trading today on the Milan stock exchange, Olivetti's shares fell slightly to 4.06 euros, from an opening price today of 4.18 euros.
Mannesmann, in Düsseldorf, Germany, can be contacted at +49-211-820-0, or on the Web at http://www.mannesmann.de/.Olivetti can be contacted in Ivrea, Italy, at +39-01-25-522-639 or on the Web at http://www.olivetti.it/.