Mergers and acquisitions refer to the corporate strategies to finance and manage a business entity by buying or combining two or more separate entities to grow without having to create one from the scratch. This paper looks at the mergers and acquisitions between Vodafone, Air Touch communications, and the Mannesmann group of companies. Nature of the industry It’s a cellular industry that dominates the European telecommunications market and they deal in a wide range of transmission of information through phone to phone, broadband media, cable systems, and data communications whereby these companies have been competitors. Economic and financial rationale Vodafone and Mannesmann had varying determinations of the value where Vodafone AirTouch valued Mannesmann at $138 billion while Mannesmann claimed that it was worth $350billion. The cellular industry was generally growing rapidly and in 1998 it had global revenue of above US $ 1 trillion which was 5% of the world GDP. The average revenue of the merger activities reached its peak in 1999 with 20-25% of the total revenue. German corporate governance It makes hostile mergers difficult to execute. It dictated that the board be divided into supervisory that would oversee the management and have the powers to appoint and dismiss board members. The management on the other hand would be charged with the responsibility of running the company. Voting restrictions in articles of association of the Mannesmann also deterred voting in excess of 5% which the German rules also adopted whenever decisions of merges, consolidations and spin-offs were to be made. Roles of the hostile take-over bid This is the takeover that’s done against the wishes of the board of directors by the acquirer giving attractive prices to lure the shareholders into accepting the offer against the wishes of the management. This destroys the company cultures as said by the chancellor and that it results in the borderless telephony markets. Strategic and economic rationale for Mannesmanns acquisition of orange Orange was the third largest telephone company in UK with a market share of 18% and 17.45% interests in Connect Austria and 45.5% in orange communications of South Africa. Mannesmann was willing to pay $6.4 in cash and 0.0965 in shares and this valued orange at with $31billion which was a premium of 17%. As a result Mannesmann share prices dropped from $154.1 to $141.3 which was a 8% drop. Hence it means that Mannesmann had overpaid Orange. The Mannesmann decision to refuse being acquired by Vodafone AirTouch was unbelievable since it has been promised to be paid $232 per share by Vodafone which was a 20%premium. The CEO claimed that they were worth $350 a share and yet they were willing to issue the 117 million shares at $157.8 per share to fund their acquisition of Orange as at December 17. If I were a shareholder of Mannesmann I would press for AirTouch – Mannesmann – Orange merger that would increase the sales to $13 billion and operations in 25 countries and 42 million equity subscribers as opposed to Mannesmann- Orange merger that garnered $5, 76 sales volumes operating in only 7 countries with14 million subscribers. The market values at 17 December The market values at the December 17 was 117 million shares of $157.8per share in Mannesmann Company Average excha