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Mannesmann Posts Defence Document Rejecting Vodafone's Offer

14 January 2000

Mannesmann Posts Defence Document Rejecting Vodafone's Offer

    Mannesmann Offers More Value Today, More Value Tomorrow and Less Risk

    DUSSELDORF, Germany, Jan. 14 -- The following release was
issued today by Mannesmann AG:

    * Mannesmann has today posted its defence document rejecting Vodafone's
      offer.
    * Vodafone's offer is wholly inadequate and carries significant risk.  The
      offer fails to take proper account of Mannesmann's unique strategic
      position and the benefits that this will bring.  Therefore, the
      Executive Board of Mannesmann, with the full support of the Supervisory
      Board, unanimously recommends shareholders to reject Vodafone's offer.

    Value
    * The Executive Board believes that Mannesmann's base value is at least
      euro 250 per share.  This is supported by trading valuations of
      comparable companies and the increase in the sector since the
      announcement of the Orange acquisition.
    * This base value excludes all of the anticipated synergy benefits with
      Orange and the significant upside potential of data, internet and
      tele-commerce.  The Executive Board believes that the potential value of
      Mannesmann including these is at least euro 350 per share.  This value
      belongs to Mannesmann's shareholders. Vodafone's offer does not
      recognise this upside, nor does it include any premium for control.
    * Consistent with its focus on shareholder value, Mannesmann is exploring
      an IPO of its internet businesses in order to crystallise their
      substantial value.

    Growth
    * The Board believes that a focused European strategy based on an
      integrated approach, control and innovative leadership will achieve
      superior growth and returns for Mannesmann shareholders than Vodafone's
      proposal.  A combination with Vodafone would significantly dilute
      Mannesmann's growth prospects:    Mannesmann telecoms is forecast to
      deliver 39% compound earnings growth for 2000-3 compared to 24% for a
      Vodafone/Mannesmann combination.

    European Platform
    * The European telecoms market represents a huge growth opportunity.
      Mannesmann already has controlling interests in leading mobile operators
      in three of Europe's four largest markets and is well placed to be the
      European partner of choice.
    * The controlled operations Vodafone adds are relatively small.  The
      biggest are Sweden and The Netherlands. Furthermore, Vodafone's offer
      would involve replacing Orange with Vodafone's UK business, despite the
      fact that Orange is substantially outperforming Vodafone in the UK by
      winning 30% more customers than Vodafone in the 4th quarter of 1999.

    Integration
    * Integrated products significantly increase ARPU and reduce churn and are
      recognised as having huge growth potential.  Scale in both fixed and
      mobile is critical to the ability to offer these integrated products, to
      access best content and to launch new tele-commerce applications.
      Vodafone's clear lack of understanding and experience in this area will
      destroy value for Mannesmann shareholders.

    Control
    * The benefits of control are undeniable and are reflected in the trend
      towards consolidation of minority operations in the sector.  Mannesmann
      controls over 95 per cent of its proportionate EBITDA.  Vodafone would
      substantially dilute Mannesmann's control position and expose it to the
      problems that Vodafone faces in trying to convince competitors to accept
      Vodafone's supposedly global products.

    Innovation
    * Mannesmann has a clear track record of innovation in all its core
      markets.  It recognised the potential impact of the internet early on
      and moved swiftly to position itself to benefit.  Vodafone, by contrast,
      has only just woken up to the internet's significance and this week's
      announcements served to highlight just how far behind it is.

    Risk
    * Vodafone's offer carries a number of substantial risks that Mannesmann
      shareholders are being asked to bear without any corresponding
      withdrawal rights.  These are real risks with significant implications
      for the value of the Vodafone shares being offered.  Vodafone continues
      to provide only vague assurances, not solutions, to these important
      issues.

    Dr. Klaus Esser, Mannesmann's CEO, today said:
    "The choice for our shareholders is about strategy, growth and real value.
Mannesmann's integrated strategy offers significantly better growth prospects
than a combined entity.  Integration is key for the growth in data and
internet.  Vodafone's offer completely fails to recognise this value and
entails unacceptable risks for Mannesmann shareholders."
    Copies of the defence document have been posted to Mannesmann shareholders
today.  Additional copies can be obtained http://www.future.mannesmann.com .

    DISCLAIMER ON FINANCIAL PROJECTIONS
    BY THEIR NATURE; THE FINANCIAL PROJECTIONS CONTAINED IN THIS PRESS RELEASE
INVOLVE RISK AND UNCERTAINTY BECAUSE THEY RELATE TO EVENTS AND DEPEND ON
CIRCUMSTANCES THAT WILL OCCUR IN THE FUTURE; MANY OF WHICH ARE NOT WITHIN
MANNESMANN'S CONTROL:  ACCORDINGLY THERE CAN BE NO ASSURANCE THAT ACTUAL
EVENTS AND RESULTS WILL NOT DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED
BY THESE PROJECTIONS.