MAY 1, 2000

Orange sale goes ahead

ORANGE, the company which is sponsoring the Arrows F1 team this year, is as expected to be sold.

ORANGE, the company which is sponsoring the Arrows F1 team this year, is as expected to be sold. The company was owned by the German conglomerate Mannesmann but that has been taken over by Britain's mobile phone group Vodafone AirTouch. In order to get clearance from the European Commission for the merger, Vodaphone was forced to agree that it would either sell or demerge Orange to avoid a monopoly situation in the British mobile phone market.

We hear that Vodaphone's institutional shareholders have told the company that it would prefer a sale rather than a de-merger as a sale could raise money which could then be bid in the current wave of auctions for future mobile telephone licences.

The sale of Orange is expected to attract a lot of bidders with France Telecom, Telefonica and MCI Worldcom expected to be the frontrunners. It will be interesting to see what happens if Orange goes to either Telefonica or MCI as both are already involved in Grand Prix racing: Telefonica with Minardi and MCI with Jaguar Racing.

It is also worth noting rumors that Orange boss Hans Snook has been offered a job with Hong Kong-based conglomerate Hutchinson Whampoa (which originally established Orange and put Snook in charge) to build a new pan-European mobile phone network for the new generation of phones.

While Orange announced that its sponsorship of Arrows would be for three years, it is not unusual for companies to change their sponsorship policy after a takeover. The most dramatic example of this came in the autumn of 1984 when CarlÊHaas announced that the giant consumer goods company Beatrice would be sponsoring his CART team and funding a new team in Formula 1. In July 1985 there was a change of management at Beatrice and in March 1986 the company announced that it was withdrawing from all motor racing sponsorships.