France Telecom sells its 35% stake in Orange Austria

Reuters

France Telecom has entered into a binding agreement with its partner Mid Europa Partners (MEP) for the sale of their combined 100% stake of Orange Austria to Hutchison 3G Austria, a subsidiary of Hutchinson Whampoa Limitied, for approximately $1.7 billion.


France Telecom (Paris) currently holds a 35% stake in Orange Austria, while MEP (London) holds the remaining 65% stake.  As part of the overall transaction, Hutchison (Hong Kong) will sell frequencies, base station sites, the mobile phone operator Yesss! Telekommunikation GmbH as well as certain intellectual property rights to Telekom Austria Group, immediately after the acquisition.

The agreement is expected to provide France Telecom with cash proceeds of around $92 million for its equity stake. Orange Austria had an estimated 2011 revenue of approximately $658 million and a total customer base of 2.3 million at the end of 2011. The company employs almost 800 people.


Hutchison, controlled by Hong Kong billionaire Li Ka-shing, has been shopping for regulated infrastructure and utility assets in developed countries, especially Britain, which is open to foreign ownership of its infrastructure assets.


"It is a good opportunity for those financially strong companies to buy assets in Europe, especially if they believe in the strong growth prospect," says Conita Hung, head of equity research at Delta Asia Financial Group.


This deal by the unit of Hutchison Whampoa follows a cluster of outbound M&A transactions from Asia in early 2012 as firms with large cash piles and low debt buy assets in Europe, where economies are struggling with the debt crisis.


So far in 2012, Asian corporates have launched about $9.3 billion worth of outbound deals, compared with $181 billion worth transactions attempted the whole of last year, according to Reuters.


High-profile deals this year include Shandong Heavy Industry Group's purchase of a 75% stake in debt-laden Italian yacht-maker Ferretti Group and China Investment Corp's purchase of an 8.7% stake in the holding company of Thames Water, the privately-held UK utility.


Hutchison said this deal would make it Austria's third-biggest mobile phone operator, with 2.8 million customers and a 22% market share. The two units had combined revenues of more than $918 million in 2011.


In Vienna, Hutchinson 3G Austria chief Jan Trinow told reporters the combined entity aimed to control a third of the market in the medium term and could generate $655 million in synergies over time. He said he hoped for anti-trust approval by mid-year and said the Orange brand would be phased out eventually.


As a second leg of the deal, Hutchison will sell some of Orange Austria's assets to Telekom Austria for $510 million, Telekom said separately.


The assets comprise frequencies, base station sites, mobile phone operator YESSS! Telekommunikation GmbH and certain intellectual property rights, the statement added.


For France Telecom, the sale is the second deal in an ongoing portfolio review aimed at exiting low-growth mature markets and returning cash to shareholders. It recently agreed to sell Orange Switzerland to private equity group Apax Partners for about $2.1 billion.

ArticleTools

Related Tags

Featured Big Data Reports

Market Opportunity: Big Data in the Internet of Things
Big Data and Analytics software and applications will play a crucial role in making IoT a success. The data generated through sensors embedded in various things/objects will generate massive amounts of unstructured (big) data on real-time basis that holds the promise for intelligence and insights for dramatically improved decision processes.

 

Structured and Unstructured (Big) Data in Telecom Analytics
This report provides the reader with a broad understanding of telecom data (structured and unstructured/big data) and related analytics. The report identifies market drivers and opportunities as well as forecasts for certain key growth areas such as deep packet inspection.

 

Telecom Carrier Big Data Operations, Applications, and Services
Telcos have a major advantage in that they have many sources of data but if they want to monetize that data and derive meaningful, actionable analytics it could be challenging due to the complexities of correlation, prediction, and the massive volumes of data from different sources.

 

Affordable Market Reports on Big Data, IoT, CDN & More!
Access the exclusive new series of market research reports brought to you through the partnership of Mind Commerce research and TelecomEngine.com.
Browse the latest titles

 

 

 

Featured Events & Partners

The Telecom Exchange (TEX)
Wednesday, June 24, 2015

Cipriani Wall Street, New York City

Designed to navigate enterprise and carrier network operators through all carrier hotels and colocation houses available in the US and globally.

Visit event website...