Telecom Lead Europe: Hutchison 3 Austria has completed
the acquisition of local competitor Orange Austria.
Presently, Orange Austria is being owned by France Telecom and private-equity firm Mid Europa
Partners, with 35 and 65 percent stakes respectively.
3 Austria will acquire 100 percent of Orange Austria for
an enterprise value of 1.3 euros and as expected 3 Austria will sell on Orange
Austria assets worth â‚¬ 390 million to Telekom Austria.
These assets include Orange’s prepaid ‘Yesss’ mobile
brand, plus spectrum and base station sites. The net consideration payable by 3
Austria of 0.9 billion euros for Orange Austria (after the sale of the assets
to Telekom Austria) equates to 6.9 x earnings (EBITDA). 3 is targeting cost and
capex synergies to the tune of 500 million euros from the combination.
The merger between third-placed operator Orange and
fourth-placed 3 would create a stronger challenger to Austria’s two largest
mobile operators, Telekom Austria’s A1 and T-Mobile.
France Telecom, Europe’s third-largest telecom operator
by market capitalization, and Mid Europa Partners acquired Austrian mobile
operator One, which they rebranded as Orange Austria, for an enterprise value
of about 1.4 billion euros in 2007.
Hutchison announced its acquisition of Orange Austria
later last year and agreed to buy Orange Austria in a deal valued at 1.3
billion euros ($1.7 billion), adding to more than $31 billion of investments in
overseas mobile-phone operations.