Hutchison Telecom acquires Orange Austria

Wednesday, 14 March 2012 00:01 - - {{hitsCtrl.values.hits}}

Hutchison’s Austrian arm 3 Austria has completed its anticipated acquisition of local rival Orange Austria, combining two of the countries networks.

3 Austria will acquire 100 per cent of Orange Austria from its current owners France Telecom (35 per cent) and private-equity firm Mid Europa Partners (65 per cent) for an enterprise value of EUR 1.3 billion.

However, as expected, 3 Austria will then sell on Orange Austria assets worth EUR390 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 EUR 0.9 billion 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 EUR 500 million 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.

“With pro-forma 2.8 million customers, a market share of 22 percent and combined revenues of more than EUR700 million in 2011E, this transaction creates a strong and competitive top three players in the Austrian market,” said 3 Austria in a statement.

According to the latest Wireless Intelligence data, Austria had 12.7 million connections in total in Q3 2011, giving the country a mobile penetration rate of almost 150 per cent.