Vodafone Mannesman Case Essay Example

case, the lobbying he could do for the deal could prove valuable.

Who is going to resist? Why? Esser resisted the offer as he believed it to be too low. He also has to take all the stakeholders’ considerations into account. And maybe most importantly, the board of Mannesmann had just done the Orange deal. They might have a emotional attachment to it, and might lose face if they’re taken over by Vodafone instead (which would nix the deal with Orange of course). If the telecom workers at Mannesmann are unionised too, their unions are likely to be concerned about job losses.They and the workers themselves are likely to resist.

Potential explanation for why Esser was resisting the deal and fought so hard: First off, Esser might simply believe the offer to be too low and his comments are just ploys to induce Vodafone to pay more. Also, as indicated earlier, Germany has a different corporate governance structure. The principal of codetermination mean that the board should maximize the value for all stakeholders, whereas the UK focuses on the maximization of Shareholder’s value.

Because of the different in executive compensation in Germany, Esser owned no options and little shares. This means he had little incentive incentives to support Vodafone’s bid, certainly at this price. Esser also claimed that 90% of shareholders believed that Mannesmann had better long term prospects as an independent company.