Vodafone sells Atecs stake

January 15, 2002 Posted: 1228 GMT

LONDON (CNN) -- Britain's Vodafone said on Tuesday it sold its stake in Atecs Mannesmann for 3.6 billion euros ($3.3 billion) to Siemens.

Vodafone, the world's biggest mobile phone operator, said the German engineering and telecoms giant would pay cash for the stake, which is two shares short of a 50 percent holding, by the end of March.

The Newbury-based company acquired Atecs as part of its $178 billion acquisition of German mobile phone company Mannesmann in February 2000. Vodafone is selling parts of the Mannesmann business that are not included in its plan to develop a global mobile phone operator.

In April 2000, Vodafone sold a 50 percent stake in Atecs, an engineering and automotive business, to Siemens for 3.1 billion and had an agreement to sell the remainder before December 31, 2003.

The 3.66 billion sale price was the lowest amount Siemens could pay for the option, originally valued at up to 3.8 billion depending on its trading performance.

But Johnathan Lewis, analyst at Dresdner Kleinwort Wasserstein in London, said Vodafone got a better price for the Atecs stake than it currently would be worth on the open market.

"It's come at the bottom of the range... but equity markets have fallen over the past two years," he said.

Money from the option, which expired at the end of 2003, would be used as part of Vodafone's management of around £17 billion in debt, but was not earmarked for any specific purpose. Vodafone is in talks to sell Mannesmann's fixed-line telecom interests.

Siemens has integrated Atecs automotive and industrial electronic units VDO and Dematic, while selling Rexroth to Bosch and Sachs, a maker of chassis components, to independent German automotive specialist ZF Friedrichshafen.

Vodafone's stock rose 1.7 percent to 163.75 pence in midday London trading, while Siemens slipped 1.3 percent to 71.70 in Frankfurt.

-Reuters contributed to this report