"Mannesmann AG (MMNGn.DE) was ready to agree on Thursday a friendly merger with Vodafone AirTouch Plc (VOD.L) -- giving Mannesmann 49.5 percent and ending a three-month battle for dominance of mobile communications in Europe.
"Industry sources told Reuters Mannesmann's supervisory board was expected to back the deal, which combines its European telecoms assets with the Anglo-American company -- already the world's largest mobile phone group.
"They said Mannesmann would get 49.5 of the company -- valuing the German telecoms and engineering group at up to 173 billion euros ($168.9 billion), making the deal the biggest corporate merger in Europe and second in the world after America Online's (AOL.N) buyout of Time Warner (TWX.N) last month.
"Chief Executive Klaus Esser, who masterminded Mannesmann's vigorous three-month defense of the audacious bid by Vodafone's charismatic Chief Executive Chris Gent, would step down from the group, sources said.
"Gent was expected to fly to Duesseldorf as soon as the board confirmed its agreement this afternoon.
"Sources close to talks between the companies said they believed Vodafone was ready to cede 49.5 percent of the new company to Mannesmann -- stopping short of the demands the Germany company had made for control of the merged venture.
"``Things are going to congeal later this afternoon, and this is the way things are heading,'' one source told Reuters.
"A deal for 49.5 percent to Mannesmann would sweeten the current 47.2 percent offer for the combined group.