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[January 04, 2013]

Hutchison 3G Austria (Hutchison Whampoa) acquires 100% stake in Orange Austria

Jan 04, 2013 (Datamonitor Financial Deals Tracker via COMTEX) -- Hutchison 3G Austria GmbH (Hutchison 3G), a mobile communication services provider, and subsidiary of Hutchison Whampoa Limited, has completed the acquisition of 100% stake in Orange Austria Telecommunication GmbH, a telecommunications company, from France Telecom SA and Mid Europa Partners LLP for approximately EUR1,300 million.

The completion follows the receipt of approval of all relevant authorities by January 3, 2012.

France Telecom is a telecommunications operator, while Mid Europa Partners is a UK-based private equity firm.

As part of the transaction, some frequencies, base stations and the mobile phone provider Yesss!, as well as certain other intellectual property of Orange Austria will be sold to Telekom Austria.

Update on December 13, 2012: Hutchison 3G has received an approval from the European Commission to acquire 100% stake in Orange Austria from France Telecom and Mid Europa Partners for approximately EUR1,300 million.

The Commission had concerns that the elimination of one out of only four mobile network operators in Austria could have led to less competition and higher prices, to the detriment of end consumers. To address these concerns, Hutchison 3G submitted remedies, offering in particular to divest radio spectrum and related rights and to provide wholesale access to its network. In light of these commitments, the Commission concluded that the transaction would no longer raise competition concerns. The approval is conditional upon the implementation of a commitments package that will facilitate the entry of new players into the Austrian mobile telecommunications market.

As part of the Hutchison 3G remedies, H3G submitted a package of commitments: Hutchison 3G commits to divest radio spectrum and additional rights to an interested new entrant in the Austrian mobile telephony market. The potential new mobile network operator (MNO) will have the right to acquire spectrum not only from Hutchison 3G but also additional spectrum at an auction planned in 2013 by the Austrian telecom regulator. The latter will reserve spectrum for a new entrant, in order to enable such an operator to build up a physical network for mobile telecommunication services in Austria. The new entrant will also benefit from privileged conditions for the purchase of sites for building up its own network in Austria.

Hutchison 3G commits to provide, on agreed terms, wholesale access to its network for up to 30% of its capacity to up to 16 mobile virtual network operators (MVNOs) in the coming 10 years. This will enable MVNOs to offer mobile telecommunications services to end customers in Austria at competitive terms and conditions. An up-front commitment ensures that H3G will not complete the acquisition of Orange before it has entered into such a wholesale access agreement with one MVNO.

Announcement (February 3, 2012): Hutchison 3G has entered into a binding agreement to acquire 100% stake in Orange Austria from France Telecom and Mid Europa Partners for approximately EUR1,300 million.

As part of the overall transaction, Hutchison 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 of Orange Austria.

The completion is expected to take place in middle of 2012.

Update on January 17, 2012: According to Bloomberg, Hutchison Whampoa is nearing a deal to acquire Orange Austria for about $1,800 million, including debt.

Orange Austria posted sales of EUR578 million in 2010.

Rumor (October 25, 2011): According to Bloomberg, Hutchison Whampoa is in talks to acquire Orange Austria.

France Telecom holds a stake of 35% and Mid Europa Partners holds a 65% stake in Orange Austria.

Morgan Stanley is acting as financial advisor to France Telecom and Mid Europa Partners, while Freshfields Bruckhaus Deringer LLP is acting as legal advisor and J.P. Morgan is acting as financial advisor to Hutchison.

Deal Value (US$ Million) 1710.37 Deal Type Acquisition Sub-Category 100% Acquisition Deal Status Completed: 2013-01-04 Deal Participants Target (Company) Orange Austria Telecommunication GmbH Acquirer (Company) Hutchison 3G Austria GmbH Vendor (Company) France Telecom SA Deal Rationale With this acquisition, Hutchison 3G strengthens its position as a mobile operator in Austria. It will also allow the company to pursue with its growth strategy.

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