Hutchison Whampoa accepts offer for its 44.81% stake in Orange plc from Mannesmann AG for HK$113 billion in cash, notes and shares

Hutchison to become the largest shareholder in one of
Europe's strongest companies

21 October 1999

HONG KONG - Hutchison Whampoa Limited ("Hutchison" or the "Company") announced today that it has agreed to accept a conditional offer to be made by Mannesmann AG ("Mannesmann") for all the shares in Orange plc ("Orange"). If the offer becomes unconditional, Mannesmann will acquire 537,234,691 shares of Orange owned by Hutchison, representing 44.81% of the issued share capital of Orange, for approximately HK$113 billion (US$14.6 billion) in cash, notes and shares of Mannesmann. The Mannesmann shares that Hutchison will receive as part of the consideration for the offer will represent approximately 10% of the pro forma enlarged issued share capital of Mannesmann. Hutchison is expected to be the single largest shareholder of Mannesmann upon completion of this transaction.

Under the terms of the offer, Hutchison will receive ￡16.29 (HK$211.43) per Orange share, consisting of ￡9.89 (HK$128.34) in Mannesmann shares, ￡3.20 (HK$41.53) in cash and ￡3.20 (HK$41.53) in notes. The transaction is expected to result in an exceptional profit before expenses of approximately HK$113 billion (US$14.6 billion) for Hutchison. The cash proceeds of HK$22 billion (US$2.8 billion) will be retained for general corporate purposes, including expansion of Hutchison's core businesses worldwide. The HK$22 billion (US$2.8 billion) of notes, to be denominated in Euros, will have a term of three years and will carry a EURIBOR based interest rate. Under the proposed arrangements, Hutchison is expected to have one seat on the Supervisory Board of Mannesmann.

Mannesmann's offer will be conditional upon: (i) its acceptance in respect of shares in Orange representing (together with shares otherwise acquired by Mannesmann) more than 50% of the voting rights normally exercisable at general meetings of Orange, including the 44.81% owned by Hutchison, and (ii) no action being initiated under applicable European or United Kingdom competition law before completion.

The directors of Orange consider the terms of the Offer to be fair and reasonable and have agreed unanimously to recommend that Orange shareholders accept the Offer.

"This landmark transaction will, if Mannesmann's offer becomes unconditional, create a powerful partnership between two of the strongest wireless network operators in Europe. We are very pleased to be given the opportunity to obtain a meaningful ownership interest in Mannesmann and are excited by the tremendous joint growth opportunities in telecommunications," said a Hutchison spokesperson.

"Orange has been an excellent investment for Hutchison. This transaction will allow us to realize a portion of our investment in Orange, but more importantly, give us a meaningful position in a much larger telecommunications platform. Mannesmann is one of the strongest companies in Europe, and has one of the largest telecommunications footprints in the continent, covering Germany, France and Italy. We are committed to our ownership in Mannesmann and look forward to continued strong growth in U.K. and European telecommunications."

The cash proceeds will further enhance Hutchison's already strong financial position. The Company is financially well positioned to capitalise on future investment opportunities that would enable it to further expand its core businesses in Hong Kong and other parts of the world.

Hutchison, a conglomerate headquartered in Hong Kong, is engaged in five core businesses: ports and related services; telecommunications; property development and holdings; retail, manufacturing and other services; and energy and infrastructure. In 1998, the Company's consolidated turnover was over HK$51.3 billion (US$6.6 billion) and after-tax earnings were approximately HK$8.7 billion (US$1.1 billion).

Mannesmann, based in Duesseldorf, Germany, is a diversified industrial company whose business lines include engineering, automotive and telecommunications. In telecommunications, Mannesmann is the leading competitive operator in the integrated European telecommunications market. With D2 and Arcor in Germany and Omnitel and Infostrada in Italy, it is the leading alternative operator in both countries and operates, with Vivendi and other partners, Cegetel, the leading competitive telecommunications company in France. Recently, Mannesmann has launched fixed and mobile operations in Austria. In 1998, Mannesmann recorded sales of Euro19,065 million (US$21,412 million) and net profit of Euro 630 million (US$708 million).

Orange provides a broad range of telecommunications services, primarily as operator of the Orange Digital Wirefree Network and in the sale and marketing of Orange products and services in the United Kingdom. Orange also has interests in several European telecommunications ventures. For the fiscal year ended December 1998, Orange recorded sales of ￡1,213 million (US$2,010 million) and operating profit of ￡15.4 million (US$25.5 million). Orange has approximately 3.5 million subscribers.

For additional information about Hutchison, Mannesmann and Orange, visit the World Wide Web at www.hutchison-whampoa.com, www.mannesmann.com and www.plc.orange.net.

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