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Vodafone's AirTouch Takeover Shows Britain's Power
LONDON — Vodafone's takeover of U.S. wireless telecoms giant AirTouch shows the global clout of British firms, which took on their American counterparts as top cross-border predators in 1998.

The Vodafone deal — valuing AirTouch at around $60 billion including assumed debt — follows in the wake last year of British oil giant BP's merger with Amoco, which valued the U.S. oil firm at $61 billion.

When it began trading earlier this month, BP Amoco had a market capitalization of some 89 billion pounds ($147.5 billion), making it Britain's largest company and the world's third largest oil group.

The new Vodafone AirTouch Plc will have a combined market value of about $110 billion, which the groups said would make it the third largest publicly-traded company in Britain with more than 23 million customers around the world.

Corporate Britain — notably utility companies — has long been a prime target for acquisitive U.S. companies keen to venture into new markets and take advantage of the liberalized environment on offer following the privatization and deregulation programs set in motion by Margaret Thatcher.

But last year the tables began to turn, with Scottish Power Plc launching a $12.8 billion takeover of Portland-based U.S. electric utility PacifiCorp in what will become the first foreign takeover of a U.S. utility if it proceeds.

U.S. utilities invested some 20 billion pounds in Britain over the past three years, but analysts now believe the flow could have been reversed.

British electricity transmission group National Grid was quick to follow on Scottish Power's heels, with a $3.2 billion cash bid for New England Electric Systems.

Other notable trans-Atlantic deals struck by British companies during 1998 included the $4.6 billion pound takeover of the educational businesses Simon & Schuster and Cable & Wireless Plc's $1.75 billion takeover of MCI's U.S. internet communications business.

Vodafone's takeover of AirTouch will also spark anticipation of more so-called mega mergers, with telecoms firms at the top of the corporate financiers' list as the sector most likely to see further global consolidation.

Competitive pressures, robust stock markets, the availability of cheap money and developments such as the advent of a single currency in Europe mean many corporate financiers are expecting another bumper year in 1999.

Worldwide mergers in 1998 are estimated by Securities Data Co to have totaled nearly $2.49 trillion, substantially ahead of 1997's $1.6 trillion. Many of these were "in-market" — between firms in the same country — rather than cross-border.

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