Vodafone merger has ramifications for Ireland
BY ROBBIE MacGABHANN
Europe's largest telecommunications company took its first steps this week after the long expected merger between British company Vodafone and the German communications company Mannesmann.
The new company valued at $375 billion will be Europe's largest publicly traded company and one of the world's largest companies. The EU Commission who have to approve the merger are set to telescope their inquiries into a four- to six-month period to fast track institutional approval for the merger.
Vodafone's chief executive Chris Gent has told the media that ``there's cheering going on inside Brussels because they see this as a European world leader being created''.
This merger comes only weeks after the conglomeration of Time Warner and America on Line to create the world's largest media company and shows that the global economy is set to be dominated by an ever decreasing number of companies. Vodafone Mannesmann will have more than 42 million customers in 15 states.
Mannesmann had for months tried to prevent the Vodafone takeover. The German government was also opposed to the takeover as they believed that is was not in their national interest. They wanted Mannesmann to remain in German hands. The fact that the merger went ahead has serious ramifications for Irish industry.
It shows that the Dublin government would be completely powerless to prevent transnational takeovers of vital Irish businesses. This is not even deemed a problem by the mainstream Leinster House parties but it could be in the near future.
The fall in the value of Irish bank shares could herald a series of takeover moves by international banks. Such moves would probably involve job losses and other cutbacks.
Eircom shares have risen substantially off the back of the Vodafone-Mannesmann merger and it is highly likely that the international buyout of the company will happen this year.
Now more than ever there is a need for serious and costly investment in communications infrastructure, especially in rural areas, the West and the North West to ensure that the benefits of this industry are shared more equitably. There is no guarantee that Vodafone or British Telecom will respond to these needs.
The merger mania is not just happenning in the banking and communications services - there are strong rumours that the US retail giant Walmart is set to buy Dunnes Stores. Again, the issue of job losses is a very real possibility of any merger.
The Dublin government needs to wake up to the implications of the merger mania sweeping international business this year. Only they can put in place the necessary constraints to ensure that the needs of the Irish economy and especially Irish workers are guaranteed and promoted in this brave new world.