Source: Bloomberg
Hong Kong billionaire Li Ka-shing’s Hutchison Whampoa Ltd agreed to buy Orange Austria in a deal valued at EUR1.3 billion (US$1.7 billion), adding to more than US$31 billion of investments in overseas mobile-phone operations.
Hutchison 3G Austria, the local unit of Hutchison, expects to complete the purchase of Orange Austria in the middle of this year, the Hong Kong parent said in a statement Friday. Some Orange Austria assets, including mobile carrier Yesss!, will be sold to Telekom Austria Group for EUR390 million after the acquisition, Hutchison said.
Hutchison shares rose to the highest level in five months in Hong Kong trading on optimism the purchase may improve its ability to compete against market leaders Telekom Austria and Deutsche Telekom AG’s T-Mobile Austria. Li, Hong Kong’s richest man, is stepping up acquisitions in Europe as companies in the region seek capital to counter the sovereign debt crisis.
“With the situation in Europe as it is, there will be opportunities to cherry-pick,” said Adrian Lowe, who rates Hutchison shares “buy” at Mirae Asset Securities in Hong Kong. The proposed acquisition of Orange Austria is “positive” for Hutchison’s mobile operations in Austria, he said.
Hutchison shares rose 3.7 per cent to HK$76.65 at the midday break in Hong Kong trading, compared with a 0.1-per cent decline in the city’s benchmark Hang Seng Index. The stock has gained 18 per cent this year.
Orange Austria is 65 per cent-owned by Mid Europa Partners, with the rest held by France Telecom SA.
The acquisition will create a mobile carrier with 2.8 million customers and more than 20-per cent market share in Austria, Hutchison said. Hutchison Austria expects to generate cost and capital spending synergies of at least EUR500 million from the combination, according to the statement.
Li is Hong Kong’s richest man with wealth of US$22 billion, Forbes magazine said last month. Hutchison, with investments in ports, telecommunications, retail, property and energy in more than 50 countries, is Li’s biggest company by revenue.
The sale of the Orange Austria stake is France Telecom’s second major disposal in two months. The former French phone monopoly announced in December that it would sell its Orange Switzerland mobile-phone unit to buyout firm Apax Partners LLP for EUR1.6 billion.
Chief Executive Officer Stephane Richard is shedding slow-growing operations in Europe as the company turns to markets such as Africa and the Middle East that promise better growth. France Telecom is also looking to sell its Portuguese unit.
