Vodafone bought Mannesmann at the top — then booked Britain's biggest loss

On 4 February 2000 Vodafone AirTouch completed its unsolicited takeover of Mannesmann, valued at more than $190bn (£113bn) by Goldman Sachs, its adviser — an unsolicited cross-border acquisition unprecedented for a German company. The financing was itself record-setting: a $30bn euro-bank loan, the largest ever at the time, and a $5.1bn equity block trade, the largest in history. The deal created the world's largest mobile telecoms provider — and left a mountain of goodwill on Vodafone's balance sheet.

On 28 May 2002 Vodafone reported a pre-tax loss of £13.5bn for the year ended 31 March 2002 — the biggest in UK corporate history, larger than Marconi's £5.7bn loss earlier that month. Inside it: a £13.4bn goodwill charge on Mannesmann, Japan Telecom and J-Phone, and a £6bn impairment of non-mobile assets including Arcor, Cegetel and Grupo Iusacell. The business underneath was growing: revenue rose 52 per cent to £22.845bn, EBITDA 44 per cent to £10.093bn. Chief executive Sir Chris Gent called the bottom line 'misleading'; the shares rose 7 per cent on the day.

The loss was the accounts catching up with the price of February 2000: Vodafone had bought Mannesmann at the top of the telecoms boom, and the industry's valuation collapsed behind it. The £13.4bn goodwill charge wrote down the deal — though Vodafone pointedly noted it was not writing down Mannesmann as a controlled mobile business.