Following confirmation Sunday that Bell Atlantic is in talks to acquire AirTouch Communications, the U.K.'s Vodafone Group PLC may now be stepping up to make a counteroffer for the U.S. cellular phone company.
The British mobile communications operator plans to offer around $45 billion in stock and cash in its bid for San Francisco-based AirTouch, according to a report in today's Wall Street Journal. However, a Vodafone spokesman refused to comment on the speculation.
AirTouch confirmed it was in talks with Bell Atlantic.
A linkup between Vodafone, one of the U.K.'s largest cellular operators with a stock market cap of 20 billion pounds ($33.2 billion), and AirTouch would create an international, global mobile communications giant. AirTouch, which has about 7.8 million customers in the U.S., also has major holdings overseas, particularly in Europe. Vodafone is mainly a U.K. provider, but it also has holdings throughout Europe that would mesh well with AirTouch here to create a Pan-European network.
Vodafone has long been interested in AirTouch, according to the report and has been on the short list of companies hoping to acquire the U.S. provider. By partnering with AirTouch, Vodafone would get a much-needed entry into the U.S.; meanwhile AirTouch could expand its overseas operations, considered by many observers as one of the company's strongest assets and largest potential area of growth.
AirTouch owns interests in cellular, paging and personal communications services in Belgium, Egypt, India, Germany, Italy, Japan, Poland, Portugal, Romania, South Korea, Spain and Sweden. In total, AirTouch serves about 35 million customers through its principal and joint ventures, the company said.
Vodafone could have a difficult time getting AirTouch to accept its offer, according to the Wall Street Journal. Bell Atlantic and AirTouch are already involved in a joint venture that could easily pave the way for a full-scale merger. However, Bell Atlantic faces its own roadblocks in its aim to acquire AirTouch, mainly potential shareholder concern about the impact of the acquisition, which would follow close on the heels of Bell Atlantic's merger with Nynex and its pending plans to purchase GTE.
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