Vodafone AirTouch Merger

During 1999, Vodafone Group Plc and AirTouch Communications Inc. merged thereby creating one of the world’s leading mobile telecommunications group. The combined company was called Vodafone AirTouch Plc. The deal was valued at $56 billion. During the acquisition period, AirTouch Communications was the largest wireless company in the United States based on the total number of customers served by its ventures. Vodafone AirTouch merger was billed as the merger of equals. At the time of union, the combined market capitalization was $110 billion. The combined company became the third largest UK public company with operations in 23 countries. The combined company had 23 million mobile customers. AirTouch shareholders received five new ordinary Vodafone shares (0.5 ADR) plus $9 cash for each AirTouch share which represented current value for each AirTouch common share of $97. The process involved creation of a new US subsidiary which was then merged into AirTouch. The combination created a global mobile group with significant presence in the United States, Europe, Asia, Africa, and Australia. It provided a complete pan European footprint with holdings in 11 European countries which included all major markets. The combined company achieved cost savings in the development and acquisition of 3G next-generation mobile handsets, infrastructure, and software. The merger resulted in the creation of a European transit network and lower leased line costs. The 250-day period daily cumulative return analysis surrounding the merger announcement shows that the Vodafone stock gained only 1.08% for the period −10 to +261 day.