Cunning Fok’s raid on Orange hen-house: Hutchison linked with EUR1bn takeover

21 Oct 2011

According to unconfirmed reports printed by News.at, Hutchison 3G Austria is preparing to initiate a takeover bid for its larger rival Orange Austria, which was put up for sale by co-owner France Telecom (FT) in July 2011. FT made the decision as part of an ongoing portfolio review; the firm’s Swiss and Portuguese assets were also put up for sale after demonstrating slow growth. The report identifies a price-tag in the region of EUR750 million (USD1.02 billion) to EUR1.1 billion, below the EUR1.4 billion that FT and co-investor, Budapest-based private equity firm Mid-Europa Partners paid for the cellco in June 2007. News.at reports that investment bank Merrill Lynch is currently in the midst of conducting due diligence on Orange Austria, with a binding offer expected in around eight weeks. Last month, in a rare visit to Austria, Hutchison Whampoa boss Canning Fok kept his cards close to his chest when quizzed on his plans, admitting: ‘[Orange is] a very good company, but I cannot comment on rumours’.

According to TeleGeography’s GlobalComms Database, as at end-June 2011 3 Austria was the country’s smallest mobile operator in terms of subscribers, with just 9.6% of the market. At that time Orange presided over a 14.5% share of the wireless sector. Meanwhile, second-largest player T-Mobile Austria recorded a 32.5% market share, meaning that any kind of consolidation between Orange and 3 would have scant effect on the established status quo of the Austrian mobile landscape.

Austria, Hutchison Drei Austria, Orange Austria