In Germany about two hundred and forty operators grant standard telephony services.
MobilCom is a German telecommunications company, which fixed-line long distance networks are among the most modern backbone infrastructures in Europe. In 2000, already operating cellular and long distance networks, MobilCom entered the 3G race with the support of France Telecom. Later, France Telecom ceased to fund MobilCom's 3G activities due to its own financial problems. However, after much acrimony, France Telecom agreed to take over the seven point one billion pounds debt, associated with the 3G activities, and for MobilCom to sell those operations. After its balance sheet was in order, MobilCom, the cellular and long distance networks operator, restructured its operations around its core mobile business.
In June 2005, MobilCom and Freenet reach agreement on a range of value ratio.
The exchange ratio was specified in the amalgamation contract, which would be defined in shares of the new company. The two companies expected that it would be calculated according to the following relation: One Freenet share will most likely correspond to between one point fourteen and one point nineteen MobilCom shares.
This spread was calculated and based on the companies' current valuations, as drawn up by MobilCom and Freenet with the assistance of the auditors KPMG and Ernst & Young.
Determining the values of two companies was a complex process: It could not be comprehended by analyzing the individual steps, involved in the process, nor could it be described in an inclusive and detailed summary. Neither the valuation work, done by the Executive Boards of the companies, provided a reliable indication of the future performance, nor did the statements about the calculated profitability purport to make forecasts or assumptions about the future development of the MobilCom share prices. The further development and final valuations might come out in differing results, which might be considerably above or below the figures, published in the announcement. Moreover, there was a possibility that no value ratio would be considered 'appropriate' under the applicable German law by the court-appointed independent merger auditor. The court-appointed independent merger auditor and the respective supervisory board(s) had to approve the fixing of a final exchange ratio.
MobilCom is one of the leading telecommunications companies in Germany, which operates cellular and long distance networks and presents ISP services. The company has its offices in Düdelsdorf and Erfurt and serves about four and a half million customers. With the reorganization of the service provider business, the company is concentrating on marketing mobile telephony contracts for the network operators T-Mobile, Vodafone and E-Plus and O2. Uncomplicated products and services are offered by MobilCom through a chain of shops, operated within a franchise system, as well as through sales partnerships with qualified specialised dealers. Consequently, the MobilCom customers can use mobile communications in an uncomplicated manner.