Mannesmann, Olivetti in Phone Venture

Mannesmann said it will pay $1.3 billion to join forces with Olivetti and challenge state-run Telecom Italia in Italy’s fast-growing mobile telephone market. Mannesmann, a German machinery and telecommunications company, said it will buy a 49.9% stake in a new venture with Olivetti that will control Omnitel Pronto Italia, Italy’s second-largest mobile phone operator, and Infostrada, Italy’s second-largest fixed-line phone company. “Olivetti is inviting Mannesmann to participate in the controlling stake, in the strategic decisions,” Mannesmann Chief Financial Officer Klaus Esser said. The new venture crowns Olivetti’s efforts to transform itself from a money-losing computer and office equipment manufacturer into a modern telecommunications company. Olivetti said it will issue up to $508 million worth of new shares, convertible bonds and warrants.