Hutchison 3G Austria, a subsidiary of Hutchison Whampoa Limited, announced today that it has entered into a binding agreement to acquire 100% of Orange Austria from Mid Europa Partners ("MEP") and France Telecom. As part of the overall transaction certain frequencies, base station sites, the mobile phone operator Yesss! Telekommunikation GmbH (“Yesss!”) as well as certain intellectual property rights of Orange Austria will be sold to Telekom Austria Group ("TA") immediately after the acquisition of Orange Austria.
The agreement implies an enterprise value of approximately €1.3 billion for Orange Austria before the sale of assets to TA. TA’s consideration for all of the aforementioned assets is €390 million . The net consideration payable by 3 Austria of €0.9 billion for Orange Austria after the sale of Yesss! as well as other assets to TA and before synergies corresponds to a 2011E Enterprise Value (“EV”) to EBITDA multiple of 6.9x. 3 Austria believes it will be able to generate cost and capex synergies with a net present value of at least €500 million from the combination. 3 Austria has also agreed to pay an integrationrelated performance based consideration of up to €70 million to MEP two years post closing of the transaction.
With pro-forma 2.8 million customers, a market share of 22% and combined revenues of more than €700 million in 2011E, this transaction creates a strong and competitive top 3 player in the Austrian market. Orange Austria’s customers will benefit from 3 Austria’s superior high speed data network coverage and quality, while all of 3 Austria’s customers going forward will benefit from superior coverage, quality, innovation and service through the improved spectrum position, retail footprint and efficiencies that the combined businesses will generate.
The completion of these transactions remains subject to the approval by the relevant regulatory and anti-trust authorities. The completion is expected to take place mid 2012.