It's clear why Vodafone conquered Mannesmann. Vodafone won because it paid to win, using its powerful stock. Its shareholders supported its share price and thereby its bid because they believed its story: that big is best in the globalizing telecoms game. And they feared failure might burst the telecoms bubble. What's less understood is how Mannesmann lost. It gave away the early momentum through bungling, suffered splits in its defence advisory team, and came within an inch of winning the hand of a French rescuer, only to hesitate. Klaus Esser made Mannesmann a top company, but his risk-taking triggered this contest and shaped its outcome. We also reveal the battle that raged beneath the surface between Goldman Sachs and Morgan Stanley during the biggest hostile takeover of all time.

The dealmakers reshaping Europe

Chris Gent (left) and Klaus Esser

It was late on Wednesday February 2, and Canning Fok was getting in the way. The chief executive of Hong Kong conglomerate Hutchison Whampoa was making his presence felt on the 21st floor of Mannesmann's headquarters, a tall office block in Düsseldorf overlooking the Rhine, where the protagonists had gathered for the final, fraught scene of a three-month takeover battle.

Fok was convinced he could help broker a peace deal between hostile bidder Vodafone AirTouch and its prey, Mannesmann, in which Fok's group held an 8% stake. But the chairman of Mannesmann's executive board, Klaus Esser, had already seen the writing on the wall. He had decided the previous day to agree takeover terms with the English raiders from Vodafone - a humiliating defeat in the stock market was his likely alternative.

Some of Esser's advisers...