France Telecom-Orange has entered into a binding agreement with its partner Mid Europa Partners for the sale of Orange Austria to Hutchison Whampoa's 3 Austria. France Telecom-Orange holds 35 percent in Orange Austria and MEP the remaining 65 percent. As part of the transaction, Hutchison will sell frequencies, base station sites, Orange's mobile discount brand Yesss! as well as certain intellectual property rights to Telekom Austria group, immediately after the acquisition of Orange Austria. The agreement implies an enterprise value of approximately EUR 1.3 billion for Orange Austria and is expected to provide France Telecom-Orange with cash proceeds of around EUR 70 million for its equity stake. Telekom Austria will pay EUR 390 million for the aforementioned assets, leaving a net price for 3 Austria of EUR 900 million for its rival Orange. Hutchison said this corresponds to an enterprise value of 6.9 times estimated 2011 EBITDA, excluding anticipated synergies of at least EUR 500 million from the combination. 3 Austria has also agreed to pay an integration-related, performance-based consideration of up to EUR 70 million to MEP two years after closing of the transaction. Subject to regulatory approval, the transaction is expected to close in mid-2012. Orange Austria had estimated revenues of EUR 500 million and a total customer base of 2.3 million at the end of 2011. The company employs almost 800 people. The combination of Austria's third and fourth largest mobile operators creates a company with a pro forma 2.8 million customers, market share of 22 percent and combined revenues of more than EUR 700 million in 2011.
Telekom Austria said it will acquire 13.2 MHz of paired frequencies, including 2x3.2 MHz in the 900 MHz band, 2x5 MHz in the 2.1 GHz band and 2x5 MHz in the 2.6 GHz band. The operator already owns 2x17 MHz in the 900 MHz band, 2x14.8 MHz in the 2.1 GHz band and 2x20 MHz in the 2.6GHz band. The company will receive up to 634 base stations, with the exact total still open for negotiations, in rural areas of Austria. TA also announced that Yesss! had more than 740,000 customers with revenues of EUR 56.4 million in 2010. It acquired the rights for the One brand, which was the name of Orange Austria until France Telecom and Mid Europa Partners acquired the operator in June 2007 for EUR 1.4 billion.