Vodafone AirTouch Deal Creates Wireless Behemoth

After two week's of high profile wooing from multiple suitors, wireless giant AirTouch Communications is being acquired by United Kingdom mobile telecommunications provider Vodafone Group Plc for $58 billion in cash and stock.

The deal creates a global telecommunications wireless powerhouse with a combined market capitalization of approximately $110 billion, observers said.

Late Friday, Bell Atlantic, called off negotiations with AirTouch citing concerns that the merger might be too much for the carrier. MCI, was also reportedly a bidder for AirTouch, but the carrier denied talks with the company.

The new company, to be called Vodafone AirTouch Plc, is expected to reach nearly one billion people in 23 countries. Corporate headquarters will be in Newbury, England, with U.S. and Asia Pacific operations headquartered in San Francisco.

Under the terms of the definitive agreement, which has been approved by each company's Board of Directors, AirTouch stockholders will receive 5 Vodafone ordinary shares plus $9 in cash for each share of AirTouch common stock held at closing.

The merger, due to close in the second half of 1999, will make Vodafone Chief Executive Chris Gent chief executive of the new company and AirTouch Chairman and Chief Executive Sam Ginn will become chairman of the board. Both Vodafone and AirTouch will appoint seven of the combined company's 14 board members.

"We share a vision of mobile communications as the principal platform for voice and data communications into the next century and have the people and assets to realize this vision," said Gent.

"Vodafone AirTouch will have the size and financial resources to take advantage of future opportunities, making the company a leading force not only within wireless but throughout the telecommunications industry," said Ginn.