Von David Hudson
The crisis in Kosovo has naturally dominated the news in Germany all week, but even in times of war, the wheels of commerce keep on spinning round.
Friday's edition of the Financial Times breaks news that two European telecommunications giants, Deutsche Telekom and Telecom Italia, have been quietly discussing a merger which would "mark a watershed in European corporate history." Together, the companies would constitute a continental empire worth well over $200 billion. The outcome of the talks, evidently in the "advanced" stage, is particularly important for the Italian telco. Joining forces with a company more than twice its value would be a far more appealing fate than succumbing to the hostile takeover bid from Olivetti, a mere fifth the size of Telecom Italia.
The revelation comes on the heels of Thursday's press conference in which Deutsche Telekom's chairman, Ron Sommer, confirmed insider speculation that Europe's largest telco is preparing to float another round of 286.3 million shares by the end of June, which at current valuations could raise as much as 22 billion marks (over $12 billion). That would even top the company's initial offering in November 1996 which brought in 20 billion marks and went on the record as the most spectacular international market debut ever.
The 1996 offering was backed by a monumental advertising campaign and drew in many investors from the German public who were playing the market for the first time. Ever since the deregulation of the telecommunications market in Germany, Deutsche Telekom has scrambled to fight off the swift and daring little upstart companies taking chunks out of the market it once monopolized by filling its war chest with funds raised on the go-go stock market.
As SPIEGEL ONLINE's Jens Dudziak writes, Deutsche Telekom's strategy is clear: "With the money raised by capitalization, the company aims, on the one hand, to pay off investments in the efficiency and performance of its telephone service in particular, but also in the rapidly growing online area. But at the same time, Deutsche Telekom will be going on a shopping tour that takes it right through Europe, the US and Asia in order to acquire profitable holdings."
The first stop on that tour may well turn out to be Italy.
Germany and Europe on the Web today:
The Financial Times story that broke news of the possible merger, plus another on Deutsche Telekom's second share flotation. The peachy paper also reports that US politicians are preparing to give German banks and industrial companies a break with regard to their debts to Holocaust victims. A corporate fund set up by the German government would relieve all participating companies of any future claims: "The aim is to begin payments on September 1, the 60th anniversary of Hitler's invasion of Poland." (Free registration required)
Guardian columnist Hugo Young doesn't hold out much hope for Joschka Fischer's peace plan: "The last German who tried to settle the Balkans by peaceful means was Bismarck." (Free registration required)
And finally, a longish read for the weekend from the April issue of Prospect magazine. Hans Johann-Glock of the University of Reading sees a thaw in the "cold war" between Anglophone analytic philosophy and Germanophone or continental philosophy which "tackle[s] profound questions such as the meaning of life and the purpose of history in a style that is lyrical at best, obscure at worst."
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