Vodafone ready for $25bn deal in America
http://observer.guardian.co.uk/business/story/0,6903,1519755,00.htmlRichard Wachman, city editor
Sunday July 3, 2005
The Observer
Senior executives at T-Mobile, wireless arm of Germany's Deutsche Telekom, have secretly discussed selling its US arm, which could raise $25 billion.
If T-Mobile pushed on with the plan, Vodafone would be a leading bidder because - for the first time - it would offer the British firm the opportunity of securing 100 per cent control of an operator in the lucrative US market.
At present Vodafone is stuck with 45 per cent of America's Verizon Wireless, a joint venture in which US-based Verizon Communications holds the outstanding shares. Ivan Seidenberg, Verizon's tough-talking chief executive, has consistently refused to sell out to Vodafone. A City source said: 'Vodafone are in a cul-de-sac in the States, but if T-Mobile decided to sell it would be a gift from heaven for Arun Sarin
.' Bankers say that any deal would see Vodafone sell its Verizon stake to Seidenberg, a move that analysts say would raise $20bn.
Two years ago, when Sarin entered a bidding war for AT&T Wireless, another US mobile operator, he made it clear funding would have been by way of a sale of Vodafone's stake in Verizon Wireless. 'Seidenberg couldn't wait to buy Vodafone out,' said an analyst.
But it is not certain that T-Mobile will sell its US arm, which has been expanding rapidly. Recent figures from Deutsche Telekom, which controls T-Mobile, were bolstered by strong growth from the US. But analysts point out that T-Mobile in the States is by far the weakest player. Other big mobile operators - Sprint, Verizon and AT&T Wireless - each have more than double the customers.
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http://observer.guardian.co.uk/business/story/0,6903,896214,00.html
BP plays Russian roulette
Ever the political strategist, Lord Browne is hedging his bets on Iraq by embracing its friends, writes Oliver Morgan
Sunday February 16, 2003
The Observer
The United States is preparing to invade Iraq. Oil prices are above $30 a barrel. Funny time, perhaps, for BP to pay up to $6.8 billion for a 50 per cent stake in a joint venture in Russia. What could Lord Browne, BP's chief executive, be thinking of?
It looks like a delicate balancing act. On the one hand Browne is in a hurry to increase BP's spread of assets around the world to seal its position as one of three 'supermajors' - a process he began with the takeovers of US firms Amoco and Arco. The fact that he has paid out for TNK when the oil price is high suggests he wanted to get on with it - and there are indications that BP's rivals are keen to buy stakes in TNK's competitors such as Yukos and Sibneft. But it also indicates he is hedging his bets on Middle Eastern uncertainty, as does his decision to focus on five future growth areas - the Gulf of Mexico, Trinidad, Angola, Azerbaijan and the Pacific. Meanwhile, he is also quietly dispensing with a 7 per cent holding (acquired with the Arco takeover), in LUKoil, the Russian major that was recently stripped by Baghdad of its contract to develop West Qurna, Iraq's largest oilfield.
At the same time, Browne has emphasised the need for a level playing field for Western companies if circumstances in Iraq change. In hedging his bets he is ensuring that BP is not left out in the cold if the situation changes. Phil Watts, head of Shell - which has a march on BP with a production agreement with Iraq - has made the same noises.
(snip)
Under one scenario, says one analyst, there may be no immediate opportunities for the West. 'There is currently $20bn in the oil for food escrow account which belongs to Iraq. If the UN were to open that account and allocate it to INOC, they could pay engineers to repair current infrastructure and open new fields and go it alone.' If Saddam were still there, Russians could expect the work, if not, US companies such as Halliburton (where US vice President Dick Cheney has been a director) and Schlumberger could move in. But for INOC to press ahead on its own in the long run is considered unlikely.
(more)
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