Hutchison to acquire Orange Austria from France Telecom for $1.7 bn

Hutchison Whampoa Ltd, run by Hong Kong billionaire Li Ka-shing, today agreed to acquire Orange Austria from France Telecom and private equity firm Mid Europa Partners, for €1.3 billion ($1.7 billion) in cash including debt.

Hutchison, which already operates in Austria under the Hutchison 3G Austria banner, said that the proposed acquisition would make it the third-largest mobile phone operator in the country, holding a 33-per cent market share with 2.8 million customers and combined revenues of more than €700 million.

3G Austria said that it has entered into a binding agreement to acquire 100 per cent of Orange Austria from France Telecom and Mid Europa Partners for an enterprise value of approximately €1.3 billion.

Orange Austria holds about €1 billion debt, which would leave €300 million to be shared by proportionately between France Telecom, which has 35-per cent stake and Mid Europa Partners, which has a s 65-per cent.

Post transaction, 3G Austria will sell certain frequencies, base station sites, mobile phone operator Yesss! Telekommunikation GmbH, and certain intellectual property rights to local rival Telekom Austria Group, for €390 million, reducing the deal size to around €900 million.

3 Austria has also agreed to pay two years post closing of the transaction an integration related performance based fee of up to €70 million to Mid Europa Partners.