European Union regulators have turned up the heat on Hutchison Whampoa's agreed €1.3 billion takeover of Orange Austria and will launch a full investigation into the deal. Such a probe is likely to lead to greater concessions from Hutchison to seal the deal's approval.
While the European Commission (EC) had previously expressed concerns that reducing the number of network operators in Austria from four to three would increase retail prices by diluting competition, it has now gone one step further.
Last month, in a bid to allay regulatory concerns, Hutchison Whampoa offered to open up its enlarged mobile network to MVNOs and enabling new players to enter the market if the deal is approved. As part of the original Orange Austria transaction, Hi3G, Hutchison's local operator, has committed to selling some of its newly-acquired Orange assets to A1 (the country's largest mobile operator, owned by Telekom Austria) as soon as it secures them.
These assets include a selection of wireless spectrum held by Orange Austria, more than 600 base station sites and full ownership of Yesss, the budget mobile operator run by the France Telecom subsidiary. A1 agreed to pay Hutchison Whampoa €390 million for those assets. Under the terms of the Orange Austria sale--which was drawn up by France Telecom, MEP, Hutchison Whampoa and A1--the deal can only go ahead if the transfer of Yesss ownership is approved by regulators and antitrust authorities.
The EC is clearly hesitant and wants to look deeper into the takeover after examining the case since June. Reuters reports that some observers have expressed surprise that the deal is coming under such intense scrutiny given it involves the country's third and fourth telecoms operators with a combined market share of 22 per cent. The EC said it will announce its findings by Nov. 30.
- see this Reuters article
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